Magnite, Inc. (MGNI) shares rose more than 6% after Craig-Hallum reiterated its Buy rating and nearly doubled its price target from $25.00 to $45.00—a 24% premium to Thursday's closing price.

Key Takeaways

  • Magnite shares moved sharply higher after Craig-Hallum reiterated its Buy rating and upped its price target to $45 per share.
  • Analyst Jason Kreyer believes that near-term opportunities and the acceleration of connected TV (CTV) will drive Magnite's financial results higher.
  • The stock appears overbought judging by its relative strength index (RSI) readings, but the overall trend remains higher as it continues to rally within a well-defined price channel.

Craig-Hallum analyst Jason Kreyer cited confidence in near-term opportunities at Magnite and the acceleration of CTV this year as catalysts for the higher price target. Kreyer believes that the company is well-positioned to capitalize on the CTV shift given its relationship with The Walt Disney Company (DIS), spend consolidation, direct-to-consumer (DTC) relationships, and an accelerated return of ad spend.

Notably, eMarketer believes that programmatic advertising on CTVs rose more than 50% year over year to $6.73 billion in 2020 and could hit $8.7 billion in 2021. These growth rates could help boost Magnite and many other companies in the CTV space, including pandemic success stories like Roku, Inc. (ROKU).

Chart showing the share price performance of Magnite, Inc. (MGNI)

TradingView.com

From a technical standpoint, Magnite stock extended its breakout to fresh highs within its rising price channel. The RSI moved further into overbought territory with a reading of 75.53, but the moving average convergence divergence (MACD) continued its bullish trend following a crossover earlier this month.

Traders should watch for near-term consolidation from Magnite stock given the overbought RSI reading within its price channel. If the stock extends its move higher, traders could see a move toward the upper end of its price channel at $47.50. If the stock moves lower, traders could see a move toward the lower end of its price channel at $30.00, although that seems less likely to occur.

Tip

Consolidation in technical analysis refers to an asset oscillating between a well-defined pattern of trading levels. Consolidation is generally interpreted as market indecisiveness, which ends when the asset's price moves above or below the trading pattern. A consolidation pattern could be broken for several reasons, such as the release of materially important news or the triggering of a succession of limit orders.

The Bottom Line

Magnite shares moved sharply higher after Craig-Hallum reiterated its Buy rating and nearly doubled its price target to $45 per share. Given an overbought RSI reading, traders could see some consolidation within the rising price channel before the stock potentially moves to fresh highs.

The author holds no position in the stock(s) mentioned except through passively managed index funds.