Trade Desk gets hit with a fresh bearish call

Monday’s downgrade parade

Wall Street kicked off Monday with a little analyst karaoke, and The Trade Desk got one of the harsher verses. HSBC analyst Mohammed Khallouf downgraded the ad-tech company from Hold to Reduce and set a $20 price target, which is awkwardly below Friday’s close of $23.06.

That’s not exactly the kind of note you pin to the fridge.

Why investors should care

When a stock is trading above the new target, a downgrade like this can act like a speed bump for momentum traders. The Trade Desk has spent plenty of time being treated like the cool kid in digital advertising, but calls like this are Wall Street’s way of saying the easy money may already be behind it.

Elsewhere in the same analyst roundup:

• Goodyear got cut to Hold
• Telephone and Data Systems was downgraded to Market Perform
• DXP Enterprises was cut to Hold
• Dell was downgraded to Neutral, even though UBS raised its price target like a plot twist nobody asked for

Big picture

For TTD holders, the takeaway is pretty simple: the business still has believers, but the valuation bar keeps getting higher. If growth doesn’t keep outrunning expectations, analysts are going to keep reaching for the brake pedal.

Big picture: in ad tech, being the favorite is nice — until the room starts asking for receipts.