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Pinterest (NYSE:PINS) and Snap (NYSE:SNAP) were both upgraded at Jefferies on Thursday as the bank sees growth ahead for both tech companies.
Snap (SNAP) was bumped to Buy from Hold at Jefferies with a $16 price target, up from $12.
Shares were up 9% in early morning trading.
The bank sees the worst of the headwinds for Snap (SNAP) behind the company and there's a pathway back to revenue growth over the next three to five years.
Snap's (SNAP) underperformance comes from the rebuild of the direct response, or DR, ad platform, which drove declining revenue for the first time ever in the first two quarters of this year. The bank now sees evidence that the DR platform is beginning to positively inflect.
The bank also sees upside revenue drivers including a deeper Amazon (AMZN) ads integration and potentially other retail integrations, the increasing contribution of Snapchat+ and expansion of brand advertising products.
Jefferies raised its 2024 and 2025 sales targets by 3% each.
The stock has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Seeking Alpha's quant system, which consistently beats the market, rates the stock a HOLD.
Pinterest (PINS) was bumped to Buy from Hold with a $41 price target up from $32.
Shares were up 4.5% in morning trading.
Jefferies sees material upside for earnings with increased confidence in ad pricing tailwinds and more durable than expected user growth and engagement gains.
The company's fourth-quarter sales guidance of 11% to 13% growth year-over-year is conservative and, barring an unexpected macro slowdown, the bank expects a beat.
First quarter sales estimates are also achievable, as well as continued growth over the next three to five years.
Jefferies raised its 2024 sales estimates by 3% and 2025 estimates by 4%.
The stock has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Seeking Alpha's quant system, which consistently beats the market, rates the stock a HOLD.