Citi sees upside for Trade Desk into Q2 results, adds on a catalyst watch

Citi has placed Trade Desk (TTD) on a 90-day positive catalyst watch, maintaining its Buy rating and $90 price target, driven by expectations of strengthening ad spending and robust connected TV (CTV) trends. Following insights from the Cannes Lions conference, the brokerage anticipates macro stabilization could lead to a Q2 earnings beat, potentially re-rating shares above 30x estimated 2026 EBITDA. Despite competitive concerns from Amazon's DSP, Citi emphasizes TTD's differentiation and its strong position within the growing programmatic ad market as ad dollars shift from linear TV to CTV.

Analysis

Citigroup has placed The Trade Desk (TTD) on a 90-day positive catalyst watch, signaling strong conviction in the company's near-term performance ahead of its second-quarter earnings. This bullish stance, which includes a reaffirmed Buy rating and a $90 price target, is predicated on insights from the Cannes Lions advertising conference suggesting a stabilization in macroeconomic conditions and a strengthening ad-spend environment since early May. Citi anticipates this trend, coupled with robust growth in connected TV (CTV), will enable TTD to exceed its Q2 guidance. The analysis points to significant valuation upside, with a potential re-rating from its current level of approximately 26 times estimated 2026 EBITDA to above 30 times should an earnings beat occur. While acknowledging investor concerns about competition from Amazon's DSP, Citi views TTD as a differentiated leader in a programmatic ad market large enough to support multiple major players, further supported by the secular shift of ad dollars from linear television to CTV.

Key Decisions for Investors

• Given the positive catalyst watch and expectation of a Q2 earnings beat, investors could consider TTD as a tactical opportunity in the ad-tech space, with the upcoming earnings report serving as a key inflection point.
• Monitor TTD's Q2 results closely, specifically for revenue growth and management's updated guidance, as these will be critical for validating Citi's thesis of a macro recovery and justifying a potential valuation re-rating.
• While the outlook is positive, investors should remain attentive to management's commentary on competitive pressures from platforms like Amazon's DSP to ensure TTD is maintaining its market position and differentiation.