JPMorgan initiated coverage of Roku Inc. on Monday with a neutral rating and a 12-month price target of $160, reflecting the streaming platform's valuation amid its pending acquisition by Fox Corporation.
The bank's target implies a multiple of approximately 16 times Roku's estimated 2028 free cash flow of $1.2 billion. Roku shares were trading at $157.49, near their 52-week high of $159.69, as of Friday's close. The valuation aligns with Fox's $160 per share offer for the company, valuing the transaction at roughly $22 billion and structured as a mix of cash and stock.
JPMorgan's initiation follows Fox's definitive agreement to acquire Roku, announced in June, which succeeded over a competing bid from Netflix. The deal's announcement prompted multiple analysts to adjust their ratings. Seaport Global Securities and Wedbush downgraded Roku to neutral or removed it from their best-ideas lists, citing the pending transaction as a key uncertainty.
Roku's second-quarter 2026 performance showed continued strength, with total revenue rising 21.9% year-over-year to $1.355 billion, exceeding both Seaport Global's estimate by 3.7% and Roku's own guidance by about 5%. Platform revenue grew 25% year-over-year, surpassing the company's 20% growth target. Adjusted EBITDA reached $254 million, a 19% margin that exceeded management's guidance of $170 million.
Advertising and subscription revenue each increased 25% year-over-year, contributing to Roku's 67% stock return over the past year, according to InvestingPro data. The company's stock was up 0.24% in recent trading, while Netflix fell 0.69% and Fox rose 0.99%.
