Snap’s shares closed at a nearly 15-month high on Monday following a surge driven by Wells Fargo’s bullish report.Shares of Snapchat (NYSE: SNAP) climbed over 4.3% to close at $15.75 on Monday, the highest price for the stock in roughly 15 months. In addition to the broader market rebound, Snap’s recent gains have likely been fueled by Wall Street’s bullishness stemming from the rebounding ad market.
Wells Fargo Hikes PT on SNAP to $22Snap, the technology company that owns the popular instant messaging app Snapchat, saw its stock price surge to the highest level in over a year. Notably, Snap’s shares closed the Monday trading session at $15.75, a level not seen since July 2022. Although Snap’s recent gains came amid a broader market rally, the latest upswing has likely been driven by Wall Street analysts’ bullish reports. Specifically, strategists at Wells Fargo hiked their ratings on the stock from Equal Weight to Over Weight and raised the price target from $8 to $22. That implies a nearly 40% upside from Snap’s latest closing price. In their note to clients, Wells Fargo analysts praised Snap’s advertising business, saying it is trending up for the first time in over two years.
“We see advertising positively inflecting at Snap for the first time since Apple’s privacy initiatives in April 2021.”
– Wells Fargo analyst Ken Gawrelski said in a note.
“We believe changes made over the past several months have meaningfully narrowed Snap’s ad product gap relative to other audience platforms.”
– the analysts added.
But even before analyst upgrades, it’s been an impressive year for the social media company. The company reported a 5% revenue increase for Q3, marking its first quarterly rise this year. At the same time, Snapchat posted 406 million daily active users as of September, up 12% year-over-year.Snap’s shares are up 78% year-to-date.
Ad Market Recovery Boosting Smaller Social Media StocksWells Fargo’s upgrades on Snap’s stock come shortly after hikes by Jefferies’ strategist, and the main factor driving Wall Street’s bullishness seems to be the recovering ad market.Despite uncertain economic conditions, the advertising businesses of tech giants like Google (Nasdaq: GOOGL) and Meta Platforms (Nasdaq: META) signaled that the ongoing AI boom was drawing marketers back to digital platforms. This trend has now spilled into smaller social media and technology stocks, including Pinterest, Snap, and Roku. RBC Capital analysts upgraded Pinterest’s (NYSE: PINS) stock to Outperform from Sector Perform. They raised its price target to $46 from $32, noting that the company is better positioned to tap into the $241 billion impulse shopping segment of digital advertising.More By This Author:Three REIT Stocks To Consider Holding In 2024
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