Evercore cuts Trade Desk target, says 13% selloff overdone

Evercore ISI lowered the firm’s price target on Trade Desk (TTD) to $32 from $35 and keeps an Outperform rating on the shares. Evercore cut the company’s estimates following reports of a “significant dislocation” in Trade Desk’s relationship with Publicis, which it notes has historically been one of the company’s largest ad agency partners. The analyst views this development as a “clear headwind” but believes the 13% selloff in the stock over the past two days has been overdone relative to potential financial impact. While Trade Desk’s billings exposure to Publicis is likely in the low double-digit percentage range, its revenue exposure is lower and a substantial portion is covered by joint business plans, which “should be relatively secure,” the analyst tells investors in a research note. Evercore’s conversations with industry participants and Trade Desk suggest that Publicis could be leveraging a contract compliance/billing audit failure as a negotiating tactic. There “could still be a resolution to come,” adds the firm.