Street Calls of the Week: Upgrades for MediaAlpha and Constellation Energy
Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for MediaAlpha and Constellation Energy and a downgrade for Roku.
InvestingPro subscribers always get first dibs on market-moving rating changes.
What happened? On Monday, BMO Capital upgraded Mediaalpha (NYSE:MAX) to Outperform with a $28 price target.
What’s the full story? BMO Capital foresees a robust surge in Transaction Value (TV)-related revenue growth from 2024 to 2025. Specifically, they anticipate auto insurers, notably Progressive, to exceed sell-side expectations by intensifying their advertising-for-growth spending in '24.
BMO Capital’s valuation multiple of approximately 25.6x on 2025 estimated adjusted EBITDA surpasses the historical average of around 21x for MAX. This divergence is driven by their projection of substantial upward revenue revisions spanning '24 and '25. However, BMO Capital acknowledges that MediaAlpha's valuation multiple may eventually revert to the mean in subsequent years as the initial advertising wave naturally decelerates, considering the cyclical nature of auto insurance profits.
Outperform at BMO means “Forecast to outperform the analyst’s coverage universe on a total return basis.”
How did the stock react? MediaAlpha traded up on the premarket headlines from $20.02 to $20.79, a gain of 4%. MediaAlpha opened the regular session at $20.95 and closed at $21.53, a gain of 7.54%.
What happened? On Tuesday, Wells Fargo downgraded Roku (NASDAQ:ROKU) to Underweight with a $51 price target.
What’s the full story? Wells Fargo believes that Walmart (NYSE:WMT) accounts for approximately one-third of Roku’s device sales and net additions. However, the retail giant is set to
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