11:19 AM EST, 12/09/2024 (MT Newswires) -- Reddit ( RDDT ) has "multiple levers" to drive growth as it rapidly initiates its pipeline of engagement and advertising initiatives, Morgan Stanley said in a note emailed Monday.

Reddit's ( RDDT ) US advertisement pricing is still over 50% lower and ad load is more than 40% lower than peers in the US, the investment bank said.

"This, combined with more engagement and expected improved ad offerings ahead (which should drive ad auction bid density and pricing) showcases the multiple levers Reddit ( RDDT ) has to pull to drive growth, while also keeping advertiser return on ad spend high."

Morgan Stanley said its updated bottom-up ad builds of time spent, ad load and ad unit pricing provides the firm with more "math" behind the strong growth it expects.

The firm said it sees a roughly 35% US ad revenue growth for Reddit ( RDDT ) from 2024 to 2027, between twice to 6x faster than peers.

Morgan Stanley upgraded the company to overweight from equalweight and boosted its price target to $200 from $70.

Reddit ( RDDT ) shares were down over 2% in recent trading.

Price: 159.09, Change: -3.67, Percent Change: -2.26