Snap Falls After Jefferies Cuts Price Target on Outlook for Ads, Users
(Bloomberg) -- Snap Inc. shares fell on Wednesday, retreating from a recent rally after Jefferies trimmed its price target by $1 to $7.
The stock dropped 5.5 percent, its biggest one-day decline since Dec. 30. The social media company is coming off a three-day rally, a stretch over which it gained more than 12 percent, and its longest such streak since November.
At current levels, the stock is down more than 70 percent from a February 2018 peak.
Jefferies’ cut target comes on “greater uncertainty around the global advertising picture in 2019 and 2020.” The firm kept its hold rating, but also lowered its target on Facebook Inc. to $180 from $200, and on Twitter Inc. to $33 from $35.
“We are lowering our user estimates for each platform as they take health and safety initiatives into 2019,” analyst Brent Thill wrote to clients. “We continue to believe that FB is best positioned at current valuations and see upside for Snap if they can follow some easy steps to clarify the story and clean up communication.”
Currently, five firms rate Snap a buy, while 21 view it as a hold and 12 rate it a sell, according to Bloomberg data. The average price target is $7.51, which implies upside of more than 20 percent.
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