Oppenheimer analysts foresee a significant boost in political advertising spending following President Biden's announcement that he will not seek re-election in 2024.
This surge is expected to "disproportionally benefit" The Trade Desk Inc . (NASDAQ:TTD), with some positive impact on Snap (NYSE:SNAP) as well.
Analysts had initially forecasted that political ad revenue would contribute only 200 basis points, or approximately $45 million, to The Trade Desk's earnings in 2024.
However, with Biden's exit from the presidential race, these projections are set to increase. "We are currently forecasting only 200bps of political ad revenue or $45M in 2024E vs. 700bps or $47M in 2020. As such, our FY24 figure will likely increase," Oppenheimer stated.
MAGNA, an industry forecaster, is projecting $9 billion in U.S. political ad spending for 2024, marking a 10% increase from the $8.1 billion spent in 2020. This rise in political advertising expenditure underscores the heightened competition and the scramble for voter attention that typically follows major political announcements such as this.
The Trade Desk is scheduled to report its Q2 results on August 8, and investors will be keen to see how these developments influence the company's outlook. Given the anticipated increase in political ad spending, Oppenheimer believes TTD is well-positioned to capitalize on this influx, potentially leading to a substantial uplift in its financial performance for the coming year.
Analysts at Truist said in a note Monday that they are maintaining a Buy rating and $105 price target on TTD heading into 2Q24 earnings.
"We expect 2Q results to come in slightly ahead of management's guidance, fueled by continued strength in CTV and in Retail Media as advertisers aggressively turn to data-driven, non-walled garden inventory consumption where TTD shines," they wrote. "We expect the 3Q guide to also come in at or above consensus as TTD sees added benefit from political & Olympics ad spend starting in 3Q24."