Please ensure Javascript is enabled for purposes of website accessibility

Why Snap Stock Surged Today

By Evan Niu, CFA - Jan 28, 2021 at 1:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Snapchat parent received two price-target bumps from analysts.

What happened

Shares of Snap (SNAP 0.26%) have surged today, up by 10% as of 12:20 p.m. EST, after getting two price-target increases from Wall Street analysts. Both Wells Fargo and Evercore ISI have boosted their valuation estimates on the Snapchat parent.

So what

Wells Fargo analyst Brian Fitzgerald raised his price target on Snap from $44 to $62 while reiterating an overweight rating. Fitzgerald is optimistic that the macroeconomic recovery in the U.S. will help sustain the momentum that many tech companies enjoyed in 2020. At the same time, lockdown restrictions are loosening and it's unlikely that lawmakers will seek to raise taxes until conditions improve.

Snapchat logo

Image source: Snap.

Evercore ISI analyst Kevin Rippey increased his price target from $42 to $57 while maintaining an outperform rating. Evercore added Snap stock to the firm's "Tactical Outperform" list, citing encouraging checks with advertisers during the holiday shopping season. Marketers "were the most bullish we have ever heard," according to Rippey.

Now what

Rippey is modeling for Snap to post revenue growth of 65% to 70% in the fourth quarter, which is the highest estimate on Wall Street. Facebook reported strong Q4 results last night, which is also encouraging for the sector, in Rippey's view.

Snap is set to report fourth-quarter results on Feb. 4, but the company did not provide any guidance due to ongoing macroeconomic uncertainty related to the pandemic. The consensus estimate calls for $854.3 million in revenue, which would represent 52% growth from a year ago.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Snap Inc. Stock Quote
Snap Inc.
$23.26 (0.26%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.