They say bulls are herd animals. That may be true for bulls on Wall Street.
Bloomberg News divulged that a spate of positive reports have gone out on Snap, the recent IPO of the parent company of Snapchat. The newswire noted that some of the biggest names on Wall Street, such as Goldman Sachs and Morgan Stanley, among others, have been sanguine on the tech firm’s progress and prospects, mostly.
Thus the ratings have ranged from neutral to buy where the “expiration period” has been lifted.
That means that research notes are fair game and likely to proliferate among sell-side firms. The stock may get a bump from its new affection on the Street, as it counts for a bit of a bust, though not necessarily a busted IPO. Shares trade for $23, down from the first day opening’s close at $24. Wall Street, at that point, was decidedly negative, with sell ratings really the only coverage.
Bloomberg noted that of total Street coverage, 41 percent of analysts say that the stock is a buy, with 21 percent at sell, and that buys have an average price target at $27, with a high of $31, issued by RBC Capital Markets. That sell-side house has said, as Bloomberg noted, “Snap has become an innovation leader — for both consumers and advertisers — in arguably the single fastest advertising medium today — mobile. It has also emerged as one of the leading media platforms for millennials. We believe that if it sustains its current level of innovation, it can sustain premium growth for a long time and scale to profitability.”
Citi, which issued a buy rating and maintains a $27 target through the next year, stated (through analyst Mark May), “While user growth and audience scale may remain modest compared with Facebook, the low rate of monetization currently and the high rate of engagement and penetration of Snapchat’s product within its core 13-24 age demo should enable significant revenue growth and margin leverage.”