DA Davidson analyst Tom Forte keeps his Buy rating and $185 price target on Roku (ROKU), defending the company after the 13.7% decline in its stock price yesterday amid competitive concerns about Comcast (CMCSA) offering a free set-top box for OTT video consumption. The analyst contends that "lowest cost provider" and "Comcast" rarely go hand in hand as customers will likely pay "hefty fees" for connectivity. Forte recommends that investors purchase Roku shares to take advantage of yesterday's pullback, also maintaining that the secular OTT shift remains in its "early innings".

Wedbush lowered the firm's price target on Roku to $80 from $120 and keeps an Outperform rating on the shares ahead of the company reporting Q1 results after market close on Thursday, April 25. The firm expects Roku to report Q1 revenue of $855M, versus consensus of $849M and guidance of $850M, along with adjusted EBITDA of $5M, versus consensus of $3M and guidance of breakeven. However, the firm applies a lower multiple on its discounted 2030 EPS estimate, stating that while it had been previously sanguine about Roku's e-commerce opportunity, it is "less so" as it became aware of some competitive disadvantages for Roku and its need to ramp investment to rise to the level of competition in the space.

Morgan Stanley named Comcast as the firm's "Top Pick in the Cable & Satellite" industry and notes that it remains the firm's only Overweight-rated name in the sector. Shares are now down 10% year-to-date despite a stable earnings outlook, says the analyst, who remains confident Comcast can grow broadband ARPU consistent with its historical 3%-4% range in 2024 and beyond. Moderating losses at Peacock and the opening of its new theme park Epic Universe in 2025 should also contribute to consolidated EBITDA growth, the analyst tells investors.