Morgan Stanley upgraded social media RDDT to "overweight"
Shares of Reddit Inc (NYSE:RDDT) are 5.2% higher at $171.26 at last glance, following a lofty bull note at Morgan Stanley. Citing a myriad of catalysts, the analyst in coverage upgraded RDDT to "overweight" from "equal weight" and added a price-target hike from $70 to a street high $200.
Per the note, Reddit's U.S. advertising revenue will rise 35% between 2024 and 2027, estimated to be between two and six times higher than its sector peers. Higher user numbers, user engagement, and ad pricing are just a few of the catalysts that the analyst predicts will drive the momentum.
On the charts, Reddit stock hit a new all-time high of $176.91 out of the gate. On pace for its seventh win in the last eight sessions, the equity is now up 160% for the quarter and nearly 200% higher over the last three months.
The upgrade has options bulls buzzing, with 8,780 calls traded so far today -- 3 times the volume usually seen at this point. Most popular by far is the weekly 12/13 170-strike call, following by the standard expiration December 200 call.
An unwinding of pessimism could fuel additional gains. Coming into today, seven of 17 covering brokerages rated Reddit stock a "hold" or worse. Plus, short interest is up 15% over the last two reporting periods, and the 8.29 million shares sold short accounts for 8.9% of the security's total available float.