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Call of the week: Credit Suisse says Snap is about to skyrocket

A bullish call on Snap (SNAP) surprised Wall Street this week and sent shares of the social media company soaring. The stock recorded its biggest intraday gain since its IPO on Wednesday after Credit Suisse published a note arguing Snap is on the verge of a rally. The firm raised its price target to $20 a share, which would be a 19% jump from where it’s currently trading at $16.74.

The timing of the call is what caught investors off-guard. After all, Snap has fallen out of favor with many analysts and hasn’t traded above its IPO price of $17 a share since July 10.

But if Credit Suisse is right, that’s about to change, thanks to Snap’s ad platform. In a note to clients, analyst Stephen Ju wrote Snap is a “scarce asset that offers advertisers access to a coveted younger demographic.”

Ju is focused on how Snap’s making it easier for brands to create ads on its platform through the launch of its ‘Snap Publisher’ tool. “In our view this was one of the more important products released this quarter as the actual generation of a vertical video creative was one of the frequently-cited impediments to spending on the platform,” wrote Ju. “As most of the large brand advertisers are already sitting on horizontally-formatted creatives, taking the friction down in putting the ad content into a vertical format vs. creating a new ad should bolster the incentive to test the platform.”

Credit Suisse’s bullish call wasn’t the only dose of good news Snap got this week. A new teen survey from Piper Jaffray found that 47% of teens say Snap is their favorite social media platform, compared to just 24% who prefer Instagram and 9% who chose Facebook (FB).

So far though, Snap isn’t as popular on the Street as it is with teens. The majority of analysts are skeptical. According to Bloomberg, the stock has a total of 10 buy calls, compared to 20 hold and 5 sell ratings.