Roku (ROKU) and Outfront Media (OUT) are up on Tuesday after the companies snagged an “overweight” rating from Morgan Stanley, from a previous investment rating of “underweight.
ROKU was up nearly 4% in premarket trading but pared some gains and is up 1% after markets opened. OUT was also up 4% before the opening bell but shed some momentum after that.
MS analysts, led by Thomas Yeh, said they expect a strong year, in terms of spending, for the U.S. advertisement market.
They view connected TV to be the fastest area of growth in a healthy ad market and believe the accelerating migration of sports and political advertising to CTV may narrow the gap between engagement share vs. monetization share.
“As more sports content and political advertising come into CTV next year, we expect a strong acceleration in U.S. CTV advertising revenue growth,” they added.
On Roku, the research firm said it sees multiple tailwinds supporting upside to the company’s platform revenue growth in 2026 and beyond.
“The size of Roku’s user base, the deepening of its streaming partnerships, and execution on new monetization opportunities suggest growth accelerates in ’26 and likely ahead of consensus expectations,” MS said on Tuesday.
On Outfront, MS said the upside to shares is expected to be driven by cyclical event tailwinds, easing revenue comps related to contract exits, growing transit revenue with high incremental margins, and easing SG&A comps.
ROKU has a price target of $135, a $50 hike, and an upside of 23.8%. OUT has a PT of $28, hiked from $20, implying an upside of more than 20%.
Additionally, the research firm also resumed its coverage on Omnicom (OMC) with an “equal weight” rating and a PT of $88 and increased its PT on Lamar Advertising (LAMR) by $5 to $140.