Rocket Fuel rallies as BMO upgrades, talks programmatic potential

BMO has upgraded Rocket Fuel (FUEL +2.1%) to Outperform, and set a $58 PT.

The firm argues programmatic/real-time bidding ad-buying solutions, such as those provided by Rocket Fuel's ad retargeting platform (previous), are "only just beginning to approach something resembling maturity" in the banner ad space, and is "just beginning to enter" the mobile market (19% of Rocket Fuel's revenue) and online video.

BMO also expects additional social media publishers such as Twitter to open up ad inventory to real-time bidding (Facebook has already done so), and sees the "evolving" nature of Rocket Fuel's relationships with advertisers and agencies boosting client spend.

eMarketer expects U.S. real-time bidding display ad spend to grow 38% in 2014 to $4.66B, thanks to higher adoption and improving ad inventory quality. AOL, Criteo, and a slew of other firms are also looking to address the opportunity.

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