Benchmark Reiterates Buy Rating on Magnite (MGNI)

Benchmark analyst Dan Kurnos reiterated a Buy rating and $21.00 price target on Magnite (NASDAQ: MGNI).

The analyst commented: "Shares of Magnite are down over 15% intraday after a Digiday podcast reiterated a story that first spawned back in March regarding Disney’s DRAX platform and standing up direct integrations with The Trade Desk and DV360. Was there some more forceful color in the answers and how quickly/to what degree those connections might get stood up? We think that might be fair (for the record, Magnite has already publicly acknowledged that Disney doing this could be long-tail TAM/upside opportunity dilutive). Is Disney going to create a full end-to-end ad stack without Magnite? Highly unlikely (if anything, we suspect Magnite may utilize their leverage as a key cog to Disney’s ad stack in whatever round of negotiations take place next; there are only so many negative headlines one can take, after all). Does this imply that Magnite will eventually get phased out by others in the ecosystem? Not if recent expansive deals or renewals with Netflix, Roku, Fox, Paramount, United, and others are to be believed. Of course, the timing probably could not be worse with the 12 million RTL shares now floating out in the ether and perhaps more speculative folks likely incorrectly linking the block trade and this “new” Disney announcement. And, we acknowledge that Disney swimming against the grain creates ongoing headline risk and potentially some very mild revenue risk (we do not believe Disney is even a top 3 Magnite customer). But to lose 1/6th of your equity value over what is really old news and with promises of a buyback pivot plus a net cash inflection and complete debt paydown coming in the next 12-24 months? Feels incredibly extreme, especially with the current shots on goal and some potential near-term fundamental upside."

For an analyst ratings summary and ratings history on Magnite click here. For more ratings news on Magnite click here.

Shares of Magnite closed at $12.36 yesterday.

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