Snap Inc. (SNAP) is experiencing a decline in its stock price following a mixed forecast and a subsequent downgrade by Wells Fargo. The investment bank lowered its rating on Snap from "overweight" to "equal weight" and reduced its price target from $15 to $11, citing concerns over the company's app redesign and advertising growth, which they believe is lagging behind industry standards. This downgrade comes despite Snap's better-than-expected fourth-quarter earnings, which saw a 16-cent EPS, surpassing the consensus estimate of 14 cents, and a revenue increase to $1.55 billion.
The mixed sentiment from analysts is evident, as some have adjusted their price targets in response to Snap's earnings report. While Wells Fargo expressed caution, other analysts like BofA's Justin Post maintained a "neutral" rating and increased the price target to $14.50, highlighting higher ad growth and the traction of Snapchat+. Despite these positive aspects, the market seems to be focusing on the potential challenges ahead, as indicated by the downgrade and the revised price target from Wells Fargo.
Snap's stock is currently trading at $10.935, down 5.73% from its previous close of $11.6 on February 4th.