In a report released today, Brian Nowak from Morgan Stanley maintained a Hold rating on Snap, with a price target of $8.50.
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Brian Nowak has given his Hold rating due to a combination of factors impacting Snap’s current and future performance. While Snap demonstrated strength in international markets, offsetting some of the weaknesses in North America, particularly with large advertisers, there are still challenges. The North American market, which significantly contributes to Snap’s revenue, showed a decline in large advertiser spending, reflecting broader industry challenges.
Despite these challenges, Snap’s profitability has been encouraging, with gross profit and EBITDA surpassing expectations. However, concerns about user engagement trends persist, with potential declines in daily active users due to age verification measures by Apple and anticipated similar actions by Google. These factors introduce uncertainty in user growth and could impact future ad revenue growth, prompting a cautious outlook and the decision to maintain a Hold rating.
In another report released today, Evercore ISI also maintained a Hold rating on the stock with a $13.00 price target.