Roblox stock jumped 5% in morning trading

Roblox stock jumped 5% in morning trading as Morgan Stanley sets Street-high price target on it.

Morgan Stanley analyst Brian Nowak said in a note to clients Wednesday evening that the stock still has more room to run.

“RBLX’s 3Q results and analyst day highlighted its early leadership in the metaverse and continued innovation to capitalize on materially higher long-term monetization opportunity. At 3Q results, we were particularly encouraged by the October trends ... as we think they speak to RBLX’s better than appreciated growth runway/ability to continue growing its user base, engagement and monetization even through reopening,” Nowak wrote.

Morgan Stanley raised its price target on Roblox to $150 per share from $88. The new target is 20% above where the stock closed Wednesday and is the highest among major Wall Street firms, according to FactSet. Shares rose nearly 4% in premarket trading Thursday.

The increased focus of companies on the metaverse should help Roblox expand its revenue opportunities in the years ahead, according to Morgan Stanley.

“We were most encouraged by management’s statement that ‘in the next 3-5 years, all brands will have a Roblox Strategy’, as we believe this speaks to the company’s focus on driving higher branded monetization,” the note said.