Snap Inc. (NYSE: SNAP) shares made a handy gain to kick off the week, following an upgrade from a formerly bearish analyst. Snap has been no stranger to analysts slashing their price targets, but when one of the bears thinks the worst may be over that is worth investors’ consideration.
Overall, Snap shares have been slaughtered no matter what timeframe is being considered. In the past 52 weeks, the stock is down 48%, and in 2018 alone the stock is down 27%. However, MoffettNathanson believes that this may be the bottom that investors have waited for.
The firm upgraded Snap to a Neutral rating from Sell and hiked the price target to $9 from $7. Although this target doesn’t imply any upside, it is an increase of 28.6% from the previous target.
One of the driving factors for this upgrade was the fact that Snap listened to its users and redesigned its app a second time. The first redesign was a big turnoff for users and investors alike, but this second attempt is garnering a more positive reaction.
Analyst, Michael Nathanson, commented in the report:
Several factors could potentially improve Snap’s situation throughout the year, including the redesign of the app redesign, completion of the shift to a programmatic advertising model, launch of the new Android app and a leaner organizational structure.
MoffettNathanson went on to say that Snap’s dirty laundry had been “sufficiently aired out in the market” and that its previous sell call and bearish sentiment are currently reflected in consensus views and estimates. Essentially, as the market has become more bearish on Snap and estimates in general are lowering, the firm doesn’t deem it necessary to have a Sell rating.
Shares of Snap were last seen up about 3% at $10.93 on Monday, with a consensus analyst price target of $12.97 and a 52-week range of $10.50 to $67.55.