On Monday, Wells Fargo analysts published a bullish report on Snap, which caused the stock to reach its highest price in more than a year.
The shares were upgraded by the analysts from equal weight to overweight, and their price objective was increased from $8 to $22. As of Monday’s market close, Snap’s price was hovering at $15.75, the highest since July 2022. In a report published on Sunday, the analysts stated that, for the first time since April 2021, advertising at the social media business is heading upward.
As compared to other audience platforms, “we believe modifications made over the previous several months have materially narrowed Snap’s ad product gap,” the analysts concluded.
On Monday, Snap shares saw a gain of over 4%. The stock has gained around 76% so far this year.
The Wells Fargo analysts continued, pointing out that Snap’s recent adjustments to its leadership and product lineup have been crucial to the company’s innovation and revenue acceleration. Rebuilding its ad business last year, Snap made smart personnel from competitors Google and Meta, the company stated in the memo.
They think the adjustments will improve Snap’s financial position.
The experts predicted significant increases in gross margin starting in 2024 and beyond. By 2027, they predict a 65% gross margin.
Source (CNBC)
