Analyst Says It's Instagram Over Snapchat For Ad Buyers

There's potential for more bullish notes to come through on Twitter

Jan 4, 2018 at 10:11 AM
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Cowen and Company this morning weighed in on social media stocks Snap Inc (NYSE:SNAP), Facebook Inc (NASDAQ:FB), and Twitter Inc (NYSE:TWTR). While the update for SNAP shares was a bearish one, FB and TWTR both saw their price targets hiked. We'll take a closer look at the analyst attention and how the stocks are reacting below.

Cowen Downgrades SNAP Stock

Snap is trading 4.4% lower out of the gate at $14.64, after Cowen cut its rating to "underperform" from "market perform" and lowered its price target to $11 from $12. The firm says its research suggests ad buyers prefer Facebook's Instagram over Snapchat, though users tended to share more on Snapchat.

Looking back, the equity has recovered slightly since bottoming near $12 in November, but the $16 level -- a long-time level resistance -- blocked its most recent breakout attempt. So it's not entirely surprising most analysts are bearish on Snap stock, with 24 of the 29 in coverage handing out "hold" or "strong sell" ratings.

FB Stock Hits Record High

Meanwhile, Cowen upped its price target on Facebook shares to $220 from $200, helping the equity rise 0.7% to trade at $185.95. In fact, it just touched an all-time peak of $186.21. This brings the security's year-over-year lead to nearly 57%, thanks to support from the 80-day moving average.

Every other analyst tracking FB is already bullish. Specifically, all 27 brokerage firms in coverage say it's a "buy" or "strong buy." Options traders have stayed optimistic, too, as call buying has roughly doubled put buying during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX. 

Cowen Raises TWTR Price Target

For Twitter, Cowen lifted its price target to $18 from $16 -- though this is still well below the equity's current price of $24.35. Still, TWTR shares were strong in the second half of 2017, evidenced by their six-month advance of roughly 36%. Considering this strength, the social media concern remains a candidate for additional bullish attention from analysts, since it only has three "buy" or better ratings, compared to 26 "holds" or worse.

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