Morgan Stanley Double Upgrade Sparks Rally in Roku Shares
New York, Tuesday, 16 December 2025.
Morgan Stanley shifted Roku to an Overweight rating with a $135 target, predicting 19% platform revenue growth in 2026—significantly outpacing previous consensus estimates.
Institutional Pivot Drives Market Optimism
On Tuesday, December 16, 2025, Roku (ROKU) experienced a notable shift in market sentiment following a decisive double upgrade by Morgan Stanley analysts [1][3]. The investment bank elevated its rating for the streaming aggregator from “Underweight” directly to “Overweight,” bypassing the neutral holding tier commonly seen in gradual adjustments [2][3]. This bullish reversal was accompanied by a substantial revision of the price target, which was hiked to $135.00 from the previous $85.00 [1][3]. The new target implies a significant potential upside of approximately 23.819% relative to the stock’s pricing of $109.03 prior to the rally [1]. In immediate reaction to the upgrade, Roku shares displayed volatility and upward momentum, trading as high as $115.03 during the December 16 session [4].
Revenue Trajectory and Valuation Shifts
The core thesis behind Morgan Stanley’s upgrade rests on a revised outlook for Roku’s platform revenue, which analysts now expect to accelerate considerably in the medium term [1]. Morgan Stanley increased its 2026 platform revenue growth estimate to 19%, a figure that stands in sharp contrast to the broader consensus forecast of 15% [1][2]. This optimism is underpinned by the belief that Roku’s expanding user base and deepening partnerships will drive monetization faster than previously anticipated [1]. Furthermore, the valuation framework has been adjusted to reflect this confidence; the new $135 price target is derived from a multiple of approximately 6.5x the estimated 2027 forward gross profits, an expansion from the prior multiple of roughly 4x [1]. This re-rating suggests that concerns regarding competition in ad-supported streaming—which previously anchored the “Underweight” thesis—are diminishing in the face of Roku’s execution capabilities [1].
Broader Analyst Consensus and Market Activity
Morgan Stanley is not alone in reassessing Roku’s prospects within the digital media economy. On December 8, 2025, JPMorgan analyst Cory Carpenter raised his price target to $125.00 from $115.00 while reiterating a Buy rating, citing Roku as a “Top Pick” in the internet space [2][5]. Similarly, Jefferies recently upgraded the stock from Hold to Buy with a $135.00 target, and Citizens maintained a Market Outperform rating with a street-high target of $145.00 [1]. Despite this wave of institutional support, investors must weigh these projections against recent insider activity. In the months leading up to this rally, significant insider selling was recorded; notably, insider Charles Collier sold over 118,000 shares in late October, and CEO Anthony J. Wood offloaded 50,000 shares in November [5]. As of December 16, Roku’s market capitalization stands at $16.1 billion, with the stock trading at $114.36, reflecting the market’s digestion of these competing factors [4].