Retailer Walmart Inc (NYSE:WMT) is reported to be considering an acquisition of smart television company Vizio Holding Corp (NYSE:VZIO). The Wall Street Journal report of deal talks had shares of Roku Inc (NASDAQ:ROKU), another smart television company, volatile on Tuesday and early Wednesday.
Here is what analysts said about the potential combination ahead of Roku’s fourth-quarter earnings report Thursday.
The ROKU, VZIO Analysts: Wedbush analyst Alicia Reese had an Outperform rating and a $120 price target on Roku.
Roth MKM analyst Scott W. Searle had a Buy rating and a $12 price target on Vizio.
JPMorgan analyst Cory A. Carpenter had an Overweight rating and a $100 price target on Roku. The analyst also had an Overweight rating and a $10 price target on Vizio.
Benchmark analyst Daniel Kurnos had a Buy rating and a $115 price target on Roku.
Piper Sandler analyst Matt Farrell had a Neutral rating and an $81 price target on Roku.
Related Link: Roku Q3 Earnings Rundown: Revenue Grows 20%, Active Accounts Jump, Shares Surge
Wedbush on Roku: The report of an acquisition of Vizio could highlight the e-commerce opportunity for Roku, Reese said in a new investment note.
“Roku and Vizio are seen as the primary competitors within Walmart’s low-budget television ecosystem,” Reese said. “More importantly, Roku and Vizio are connected TV advertising platforms with large amounts of consumer data.”
The analyst said an acquisition of Vizio could help Walmart compete with Google, Amazon and Roku with its own connected TV advertising platform.
“The proposed deal, if consummated, would allow the United States’ largest retailer to leverage TV viewership data to market its products across its ecosystems.”
Resse said Roku’s 76 million active accounts were the most among connected TV platforms and the company could have an opportunity given Walmart’s interest in a rival.
“The proposed deal between Walmart and Vizio underscores the massive opportunity for the CTV industry to drive ad dollars away from traditional linear television to CTV.”
Roth MKM on Vizio: Walmart and its Sam’s Club segment make up around 45% of Vizio’s sales, Searle noted.
“This could be further leveraged into Walmart’s white label onn. electronics brand,” Searle said.
The analyst doesn’t see a large margin benefit from the combination with…
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