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BofA Upgrades Twitter After Internet User Survey, Finds Falling Snapchat Usage

Dave Royse

Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG)'s Google and Facebook, Inc. (NASDAQ: FB)-owned Instagram have the most positive user trends among consumers 18-65, according to an internet site user survey released Thursday by Bank of America Merrill Lynch.

More younger users are tweeting, the December survey found. BofA upgraded Twitter Inc (NYSE: TWTR) from Underperform to Buy  and increased the price target from $31 to $39.

Snap Inc (NYSE: SNAP)’s Snapchat, however, received a frowny face emoji. More than 40 percent of respondents who use Snap said they were using it less — a slight increase from when the survey was last completed in May 2018. 

“Snapchat data continues to suggest few signs of a turnaround, and share loss to Instagram, and we do not anticipate an improvement in Q4 user trends,” analyst Justin Post said of the platform.

Google 

Google has the most stable usage trends, according to the survey: 95 percent of respondents reported stable to increasing use of Google, and 96 percent of respondents said they use the search engine. 

Google has less risk from the European Union General Protection Regulation, Post said.

BofA maintained a Buy on Alphabet with a $1,350 price objective. 

Instagram 

Forty-four percent of respondents in the BofA survey reported increasing usage of Instagram, more than any of the other sites mentioned. Only 23 percent said they were using Instagram less. Instagram had the largest increase in penetration, rising from 53 percent when the survey was done in May to 60 percent.

Twitter

Nearly half of respondents — 48 percent —said they use Twitter, and the percentage of users who said they’re using it less fell slightly. The number of Twitter users who said they plan to use the social media platform more also grew along with the number of younger users. 

Facebook

Facebook remains the No. 1 preferred social site: 41 percent of respondents said if they could use only one social networking site, they’d choose Facebook. That number is lower than in BofA's last survey, though, and more than half of respondents also said Facebook has too much advertising.

Still, it’s used by 86 percent of those surveyed, second only to Google.

Snapchat 

Snapchat hasn’t fully rebounded from a redesign that users disliked, according to BofA. The percentage of users who said they're using Snap less rose from 37 percent in the second-quarter survey to 42 percent in December.

BofA maintained a Neutral rating on Snap with a $7 price objective. 

Related Links: 

Analyst: Instagram Could Contribute 26% Of Facebook Ad Revenue By 2020

Twitter Flies After Q3 Earnings; Analysts Weigh In On What To Do With The Stock

Latest Ratings for TWTR

Date Firm Action From To
Jan 2019 Bank of America Upgrades Underperform Buy
Dec 2018 Guggenheim Initiates Coverage On Buy
Oct 2018 Aegis Capital Maintains Buy Buy

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View the Latest Analyst Ratings

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