What happened

Shares of Snapchat owner Snap Inc. (NYSE:SNAP) popped sharply higher this morning, rising 6% as of 11:23 a.m. EST.

You can thank Wall Street analysts: First, this morning, Jefferies & Co. upgraded Snap from a hold to a buy and gave it a $21 price target. (Snap is currently trading at around $17.70.) Then Cowen & Co. echoed the sentiment, upgrading the stock from market perform to outperform with a $20 price target.  

Fingers snapping

Image source: Getty Images.

So what

Of the two upgrades, we have more details on Cowen's (with a hat tip to our friends at StreetInsider.com for the details).

Snap is set to report its fourth-quarter and fiscal 2019 earnings after market close on Feb. 4. Cowen didn't say much about how it thinks 2019 ended for the company, however; instead, it focused on what Snap's guidance might look like for 2020 and beyond.  

In that regard, the analyst noted that its survey of ad buyers shows many are "considering SNAP for new P13-34 branding campaigns" in 2020, and at least 6% of respondents "view SNAP as an emerging platform for meaningful ad spend" (emphasis added). Cowen further observed that ad pricing is stabilizing.

Now what

Between the prospect for more ad sales and better prices on those ads, Cowen raised its earnings expectations for the entire period running from 2019 through 2024. Mind you, according to data from S&P Global Market Intelligence, most analysts still don't expect to see Snap produce GAAP profits before 2023. But the prospect of a reduction in losses seems to have been enough to convince Cowen, at least, to assign the stock a new price target of $20 -- 25% higher than the analyst's previous assessment of the company's value.