Snap Price Target Increased to $26 by Stifel

Photo Credit: Morning Brew

Snap is building a case that it is among the best-positioned companies to capture a growing share of digital advertising dollars in a post-COVID environment. On Friday, the Snapchat parent company received a price target hike to $26 (previously $18) from Stifel analyst John Egbert, who cites healthy trends in audience growth amid the pandemic and a rebound for digital advertising demand as reasons to be optimistic.

Audience trends: Stifel says Snap is on track to at least meet its guidance for 10 million sequential net daily active user additions in the second quarter. Additionally, Egbert said that newly announced platform updates and product innovation from Snap’s annual Partner Summit “should help drive increased user engagement and potentially open up new revenue streams with the integration of more digital services from third-party providers.”

Call it a comeback? Economic turmoil resulting from the COVID-19 outbreak caused many brands to tighten their purse strings and dramatically cut down on advertising. Egbert says most advertisers and agencies saw digital ad pricing crater by -20% to -30% year-over year. With the economy gradually reopening, Stifel sees signs of price stabilization. 

Go deeper: Snap innovation and the health of digital advertising