US advertising spending is expected to have a strong year in 2026, supported by events like the Olympics, the FIFA World Cup and political advertising, Morgan Stanley said in a note Tuesday.

The brokerage raised its US advertising growth outlook for 2026 to more than 10%, up more than 150 basis points from prior guidance. The investment firm noted that core ad growth has continued to outpace overall economic growth and that digital transformation and new spending categories are expected to support the trend.

Advertising momentum is expected to improve further as more sports and political spending shifts into connected TV, according to the note.

Roku (ROKU) was upgraded to overweight from underweight and its price target was raised to $135 from $85, the analysts said, adding that they now expect the company's platform revenue to grow about 19% in 2026, compared with their previous outlook of 15%.

Morgan Stanley also upgraded Outfront Media (OUT) to overweight from equalweight and raised its price target to $28 from $20. The firm said that improving ad demand, easing comparisons, growing transit advertising revenue, and better cost control support higher earnings.

The brokerage also resumed coverage on Omnicom Group (OMC) at equalweight. The firm noted that Omnicom's recently closed merger with Interpublic Group (IPG) provides scale for investments in areas such as retail media and artificial intelligence, but that top-line benefits from the deal are expected to take time to materialize.

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