Snap Inc (NYSE: SNAP) is having an overwhelmingly rough start in the pre-market this morning, and for good reason. The company was the center of an analyst downgrade, but not just any downgrade. The bank that downgraded the stock was also the one that helped to take the company public. Of course, this led to concerns among investors, causing declines in the stock and prompting our partners at Trade Ideas to alert us to the losses. At the moment (8:22), SNAP is trading at $16.99 per share after a loss of $0.71 per share (4.18%) thus far today.
SNAP Falls On Analyst Downgrade
As mentioned above, Snap Inc (the parent company of Snapchat) is having a rough day in the market today after the same investment bank that took the stock public produced an analyst downgrade surrounding the stock. It seems that as soon as the stock fell below its IPO price of $17 per share, Morgan Stanley decided to lose faith.
In a note this morning, the company announced that it has downgraded the stock to equal weight from overweight and cut the price target from $28 per share to $16 per share. In a note, analyst Brian Nowak had the following to offer:
“SNAP's ad product is not evolving/improving as quickly as we expected and instagram competition is increasing... We have been wrong about SNAP's ability to innovate and improve its ad product this year (improving scalability, targeting, measurability, etc.) and user monetization as it works to move beyond 'experimental' ad budgets into larger branded and direct response ad allocations.”
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What We'll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on SNAP. In particular, we're interested in seeing if these analyst notes light a fire under the company and get innovation rolling on the advertising side of the coin. Nonetheless, we'll continue to follow the story closely and bring the news to you as it breaks!
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