Citi ups Reddit target, says buy on post-earnings selloff

Citi raised the firm’s price target on Reddit (RDDT) to $220 from $200 and keeps a Buy rating on the shares post the Q4 report. The firm says that although Reddit reported a “beat and raise quarter,” the shares declined 13% due to relatively high expectations and lower than expected daily active users following a Google Search algorithm change late in Q4. However, given its view that the Google change impact has been mitigated, greater advertiser demand, and expanding margins, Citi would take advantage of the dislocation in shares. It believes Reddit can grow engagement and lead to broader search share gains.