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Roku and Netflix surge after upbeat analyst reports

Roku and Netflix surge after upbeat analyst reports

FILE PHOTO A video sign displays the logo for Roku Inc, a Fox-backed video streaming firm, in Times Square after the company's IPO at the Nasdaq Market in New York, U.S., September 28, 2017. REUTERS/Brendan McDermid/File Photo GLOBAL BUSINESS WEEK AHEAD

NEW YORK: Shares of Roku Inc surged over 11 per cent on Wednesday (Aug 26) after Citi initiated coverage of the streaming video company with a "buy" rating, while Netflix Inc also rallied more than 11 per cent and was on track for its largest one-day gain in three years.

Roku and Netflix are among several technology-related companies that have benefited as a result of the coronavirus pandemic, with people around the world spending more time at home.

Citi analyst Jason Bazinet started coverage of Roku with a US$180 price target, compared with Wednesday's price of about US$164.

In his research note published late on Tuesday, Bazinet pointed to strong subscriber growth and increased value per subscriber, in a trend he suggested would also benefit Netflix.

Also on Tuesday, Piper Sandler analyst Yung Kim published a survey that found most US Netflix subscribers were willing to accept a price increase. Kim's survey also found that more subscribers planned to keep Netflix than other video streaming services after the COVID-19 crisis subsides.

Kim rates Netflix "overweight," with a US$534 price target, below Wednesday's price of around US$545.

Netflix's stock was set to close with its largest one-day gain since July 2017. Netflix's shares are up more than 60 per cent year-to-date, while Roku has gained over 20 per cent.

Source: Reuters

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