The bullish case for live TV streaming platform FuboTV Inc (NYSE:FUBO) has come to an end at BMO Capital Markets although it’s based on valuation reasons rather than an incrementally negative view.
The Analyst: Daniel Salmon downgraded FuboTV’s stock from Outperform to Market Perform with a price target lifted from $33 to $50. Shares fell more than 15% and closed Wednesday at $52.59 following the downgrade.
The Thesis: FuboTV’s recent surge from $5 per share to more than $60 warrants a move to the sidelines, Salmon wrote in a note. In fact, the company boasts a “more promising path” towards profit many investors expect, mostly due to improved attachment rates.
Meanwhile, FuboTV’s recent acquisition of Balto Sports will help it launch a free-to-play gaming feature in 2021 and the company will update investors over the coming months.
Related Link: 6 Reasons To Own FuboTV In 2021
Over the past few weeks, the stock has attracted investor attention on both sides of the bull versus bear debate. It may seem the bear side has more compelling near-term arguments, including an upcoming Dec. 30 share lockup and expectations for subscribers to decline after the end of the NFL season with the Super Bowl.
Also, FuboTV won’t be able to offer NBA and men’s college basketball games on Turner network although it does offer ESPN. As such, the research firm is modeling “more conservative” subscriber assumptions for the first half of 2021 compared to the Street.
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