---
title: "BUZZ-Roku falls as Wells Fargo downgrades to \"underweight\" on shifting competitive landscape"
description: "Roku's stock fell 2.5% after Wells Fargo downgraded the streaming-device provider to \"underweight\". The brokerage cited the acquisition of Vizio by Walmart as a significant risk, leading to a decrease"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/108741940.md"
published_at: "2024-02-27T14:29:51.000Z"
---

# BUZZ-Roku falls as Wells Fargo downgrades to "underweight" on shifting competitive landscape

> Roku's stock fell 2.5% after Wells Fargo downgraded the streaming-device provider to "underweight". The brokerage cited the acquisition of Vizio by Walmart as a significant risk, leading to a decrease in net adds for Roku. Additionally, competition from heavyweights like Netflix and Amazon has impacted Roku's stock, which has dropped 32% since February 15. The current rating on Roku is "hold" with a median price target of $81.

\*\* Roku Inc’s (ROKU.O) stock down 2.5% at $62.73 premarket after Wells Fargo downgrades streaming-device provider to “underweight” from “equal weight”, saying it thinks Walmart’s (WMT.N) acquisition of Vizio (VZIO.N) creates substantial risk

\*\* Brokerage chops PT from $77 to $51, implying ~21% downside to stock’s prior close

\*\* Deal with smart-TV maker VZIO sets a new connected TV (CTV) valuation well below ROKU’s current multiple, Wells Fargo analyst Steven Cahall says in research note

\*\* Cahall thinks WMT is ~1/3rd of ROKU’s device sales/net adds, but with the retailer set to buy VZIO for its SmartCast O/S, this will likely pressure net adds by 2025-26

\*\* In addition, with WMT likely moving its onn CTV to SmartCast, ROKU will need to reposition given “this major shift in the competitive landscape”

\*\* WMT last Tues announced $2.3 bln deal to buy VZIO

\*\* ROKU’s stock has shed 32% since co on Feb 15 forecasted steeper-than-expected Q1 loss amid stiff competition from heavyweights such as Netflix (NFLX.O) and Amazon.com (AMZN.O) for advertising dollars

\*\* Current rating on ROKU among 33 analysts is “hold”, per LSEG; median PT of $81 down from $85 a month ago

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

### Related Stocks

- [WMT.US - Walmart](https://longbridge.com/en/quote/WMT.US.md)
- [ROKU.US - Roku](https://longbridge.com/en/quote/ROKU.US.md)
- [AMZN.US - Amazon](https://longbridge.com/en/quote/AMZN.US.md)
- [NFLX.US - Netflix](https://longbridge.com/en/quote/NFLX.US.md)
- [WFC.US - Wells Fargo](https://longbridge.com/en/quote/WFC.US.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
