Roku (ROKU) - Get Report shares were on the rise on Thursday after the streaming-content provider’s price target was raised to a Wall Street-high of $410 on expectations that its deal to add HBO Max to its platform will help boost revenue and earnings.
Roku stock gained more than 7% in premarket trading after Benchmark analyst Daniel Kurnos lifted his one-year price target to a street high $410 from $300 on what he expects to be “significant upside surprise in 4Q.”
Roku and WarnerMedia on Wednesday announced an agreement to bring HBO Max to the Roku platform. As of Thursday, Roku users will be able to download the HBO Max app from the Roku channel store and subscribe directly on their Roku device to access all of HBO Max. The service costs $15 a month.
The deal allows Roku's popular lineup of streaming devices to support HBO Max's app, a breakthrough in a months-long standoff over which side had control of the data, money and programming. Roku had blacked out HBO Max's app from its service since its May launch.
While “largely the expected outcome” it shows the strength of Roku’s negotiating position and its leadership in the streaming-video industry, Kurnos wrote. “As long as numbers remain easily beatable and the short interest remains elevated,” shares should continue to drift higher.
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