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Snap Gets Price Target Boost to $52 at Guggenheim

Analyst Michael Morris, who maintains a buy rating on the stock, raised the target on Snap to $52 from $36.

Snap  (SNAP) - Get Snap, Inc. Class A Report, the parent of the photography-focused social-media group Snapchat, received a share price target increase from Guggenheim Securities on Monday.

Shares of the Santa Monica, Calif.-based Snap were down 3.9% to $41 .48 in a broad market swoon.

Analyst Michael Morris, who maintains a buy rating on the shares of Snap, raised the price target on the stock to $52 from $36.

"We have updated our model and valuation on Snap to reflect our greater confidence in the company’s long-term revenue and cash flow growth potential," Morris said in an investors' note. 

Specifically, Morris said, he believes Snap "is in the early stage of a virtuous cycle that leverages the company’s technology to drive higher user engagement and satisfaction, improved advertiser ROI on a global basis, and expanded content partnerships."

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Last week, Snap reported a narrowed third-quarter loss and surprised Wall Street investors by posting an adjusted profit. Revenue rose 52% to $678.7 million from $446.2 million, boosted from the July boycott of Facebook  (FB) - Get Facebook, Inc. Class A Report by key advertisers. 

Daily active users rose 18% from a year earlier to 249 million.

CEO Evan Spiegel said that "the adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us." 

Morris cited this in his note, saying that he believed Snap "also offers advertisers industry-leading full-funnel advertising opportunities, particularly for younger audiences and through the use of augmented reality (A/R) functionality for product engagement."

"While e-commerce will likely be the primary market focus through the holiday shopping season, we see full-funnel marketing as a leading market-wide initiative into 2021 and see Snap in a leadership position to gain market share," Morris said.