By Dhirendra Tripathi
Investing.com – Roku stock (NASDAQ:ROKU) fell 5.3% Monday after Morgan Stanley (NYSE:MS) reiterated its underweight rating on the company with a target of $310, StreetInsider said.
The target price is around 4% higher than the stock’s current level of $211.
Analyst Benjamin Swinburne cited heightened competitive intensity and a fragmented global landscape as reasons for his pessimism on the stock.
As per StreetInsider, Swinburne believes that while a duopoly is unlikely in the connected TV industry, platforms that can combine a large user base with a scaled offering to advertisers through ad tech, an operating system, and a highly engaged streaming service can derive long-term strategic value.
The streaming industry is heading toward streaming through smart TVs and not connected devices, according to the analyst.
He said the stock trades at a premium to peers on an absolute basis and he sees risks skewed to the downside.
Roku stock is up over 57% in a year as compared to Nasdaq's NASDAQ Composite 32% gain.