On Tuesday, Stifel adjusted its price target for Nexxen (NASDAQ:NEXN), a player in the digital advertising sector, raising it to $6.00 from the previous $5.50. The firm continues to give Nexxen a Hold rating despite the company's first-quarter performance, which surpassed consensus expectations in terms of contribution excluding Traffic Acquisition Costs (ex-TAC) and EBITDA.
Nexxen's management left the full-year guidance unchanged, echoing sentiments similar to the previous quarter. They acknowledged ongoing challenges, including macroeconomic pressures and a shift in advertising spending from Connected TV (CTV) to lower-cost display options.
However, they anticipate these adverse trends will subside as the year progresses and the company starts to fully leverage recent initiatives. These initiatives include data partnerships, political advertising opportunities, and expanded integrations with CTV Original Equipment Manufacturers (OEMs).
Stifel's report indicates that Nexxen is aligning its strategies to capitalize on industry movements, particularly within CTV and the broader digital advertising landscape. The firm notes that while the company's goals are appropriate, it awaits stronger evidence of Nexxen's growth in the CTV segment aligning with the overall industry before adopting a more bullish stance.
The firm slightly adjusted its estimates for Nexxen, leading to the revised price target. The Hold rating suggests that Stifel advises investors to maintain their current position on Nexxen's stock until potential growth in the CTV domain is more evident. The sentiment from Stifel reflects a cautious optimism for Nexxen's future performance, hinging on the successful execution of its strategic initiatives in the face of existing industry challenges.
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