Streaming video platform Roku (ROKU) saw its shares surge on Thursday in response to its long-awaited deal to carry the HBO Max subscription video-on-demand service. Roku stock hit a record high on the news.
Roku and AT&T (T)-owned WarnerMedia announced their agreement late Wednesday. The deal comes nearly seven months after HBO Max debuted and about a week before superhero movie “Wonder Wonder 1984” premieres on the service.
The two companies stalled in negotiations over revenue-sharing arrangements. They left terms of the deal undisclosed.
HBO Max is using Roku Pay, a fast and simple way to pay on Roku streaming devices, according to a joint news release.
Roku Stock Nabs Price-Target Hikes
In morning trading on the stock market today, Roku stock spiked to an all-time high of 352.12. In recent trades, Roku stock was up 4.1%, near 339.20.
Benchmark analyst Daniel Kurnos reiterated his buy rating on Roku stock and raised his price target to 410 from 300.
“While we acknowledge that a lot of the good news already appears to be priced into the stock, we still anticipate a significant upside surprise in Q4, driven by advertising strength,” Kurnos said in a note to clients Thursday. That advertising strength “should flow through into 2021,” he said.
The HBO Max deal cements Roku’s leadership position in the streaming video space, Kurnos said.
Elsewhere, BofA Securities upped its price target on buy-rated Roku stock to 380 from 360.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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