UBS Downgrades The Trade Desk to Buy with PT of $80 from $105.

UBS Downgrades The Trade Desk to Buy with PT of $80 from $105.

UBS Group AG has downgraded its rating on The Trade Desk from Outperform to Buy, reducing its price target from $105 to $80. The move comes following the company's second-quarter earnings report and the analyst's concerns about The Trade Desk's growth trajectory and ability to maintain its previous valuation premium [2].

The Trade Desk, currently valued at $26.91 billion, reported a 19% revenue growth in its most recent quarter, surpassing prior guidance and Wall Street expectations. However, the company provided a cautious outlook, indicating a sequential slowdown to 14% for the upcoming quarter [2].

UBS analysts cited concerns about The Trade Desk's ability to protect itself from in-house migration and total addressable market compression without evidence of successful execution on direct brand initiatives. Additionally, the analysts expressed uncertainty regarding the macroeconomic environment, agency landscape, recovery timeline, and The Trade Desk's ability to return to growth rates exceeding 20% [2].

This downgrade reflects a broader trend of mixed analyst sentiment surrounding The Trade Desk's future performance amid evolving market conditions. Other analysts have also revised their price targets and ratings, with RBC Capital, Guggenheim, and Truist Securities maintaining their Buy ratings but lowering their price targets. Meanwhile, BofA Securities downgraded The Trade Desk from Buy to Underperform, citing concerns over competitive pressures and the company's ability to sustain its long-term growth trajectory [2].

The Trade Desk has maintained a robust revenue growth of 23.18% over the last twelve months, according to InvestingPro data. However, the company's ability to recapture its previous valuation premium may be challenged by the headwinds and uncertainties facing it [2].

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/UBS/pressreleases/34171520/rbc-capital-sticks-to-its-buy-rating-for-ubs-group-ag-ubs/
[2] https://www.investing.com/news/analyst-ratings/the-trade-desk-stock-rating-downgraded-to-neutral-by-btig-on-growth-concerns-93CH-4181372