SNAP Stock Gains On Q2 Beat, Splitting Wall Street Between ‘Solid Footing’ And ‘Too Early’ To Call A Turn

Barclays said Snap's return to nearly 20% revenue growth should help rebuild investor confidence and lifted its price target to $16.

• Most analysts remained cautious, saying it is still too early to determine whether Snap's stronger performance reflects a lasting turnaround or favorable industry conditions.
• UBS, Wells Fargo, Citi and Guggenheim all raised their price targets but maintained ‘Neutral’ or ‘Equal Weight’ ratings.
• Truist and Bank of America lowered their price target on SNAP stock to $7 from $8.

Shares of Snap (SNAP) jumped in early morning trade on Tuesday after a slew of price hikes from Wall Street following the firm’s second quarter earnings reports, which came in ahead of market estimates. 

While most firms noted improving advertising trends for Snap, most stopped short of declaring Snap's turnaround complete, as per TheFly.

SNAP stock rose as much as 5.1% in pre-market trade, on track to hit an over one-month high, and was among the top trending tickers on Stocktwits at the time of writing. The shares have fallen nearly 40% this year.

Retail sentiment around the communications major rose to ‘extremely bullish’ from ‘bullish’ territory over the past day. Chatter rose to ‘extremely high’ from ‘normal’ levels with data showing an over 2,300% jump in message volume over the last 24 hours.  

Barclays Sees Confidence Returning

Barclays delivered one of the most optimistic takes following the earnings report, raising its price target to $16 from $15 while maintaining its ‘Overweight’ rating. The firm said Snap's return to nearly 20% overall growth "for the first time in a long while" should help restore investor confidence. 

Barclays also noted Snap’s 9% advertising revenue growth, stating that it puts the company on "more solid footing" after several quarters of slower expansion.

Most Analysts Remain Cautious

UBS raised its price target to $5.70 from $5 and maintained a ‘Neutral’ rating. The firm said advertising growth accelerated, but questioned whether that momentum can continue once World Cup-related spending fades and competition for digital advertising intensifies.

Citi raised its target to $6.75 from $6.50 while also maintaining a ‘Neutral’ rating, and Wells Fargo lifted its target to $6 from $5 with an ‘Equal Weight’ rating. They both stated that improving advertiser demand and continued subscription growth are encouraging, while also noting that it was still "too early to call a turn in the story."

Truist and Bank of America (BofA) lowered their price target on SNAP stock to $7 from $8. The former gave the shares a ‘Hold’ rating, while the latter’s rating stood at ‘Neutral’.