U.S. Markets open in 3 hrs 44 mins

Snap Gains as Wall Street Praises Overseas Growth Prospects

Kamaron Leach

(Bloomberg) -- Snap Inc. drew a chorus of bullish commentary Monday as Wall Street raved about prospects for the company, indicating that potential user and revenue growth appear promising.

Shares in the Venice, California-based social media platform rose 7.8%, the most since July. The move follows LightShed Partners initiating the stock with a buy rating and $20 price target, highlighting that the firm’s “conviction in Snapchat’s recovery has grown meaningfully over the course of 2019,” according to a note to clients.

LightShed’s Richard Greenfield said the real opportunity for Snapchat is overseas, especially in areas like India.

“There is tremendous opportunity regardless of the overall economic environment that we’re in,” Greenfield said in an interview. “It’s still early days for Snapchat.”

Credit Suisse also joined the list of bulls rallying behind the stock, boosting its price target by $1 to $21 per share as Snap “has come full circle.” Analyst Stephen Ju says the company is now “delivering on the investment thesis” from the time in which it went public, and sees “significant room” for management to increase the advertisement load in pursuit of increasing revenues.

While the stock has fallen 18% since a high in late July, Wall Street appears optimistic about daily active user metrics ahead of the company’s third-quarter earnings report coming Tuesday after markets close. MoffettNathanson expects Snap will deliver “a meaningful beat” despite “early signs that user growth has turned negative” for the fourth quarter.

--With assistance from Gregory Calderone.

To contact the reporter on this story: Kamaron Leach in New York at kleach6@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Randall Jensen

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.