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SNAP

Snap

$7.76

-0.46 (-5.60%)

, FB

Facebook

$160.71

-1.76 (-1.08%)

10:13
10/04/18
10/04
10:13
10/04/18
10:13

Snap slides after analysts cut price targets on decelerating user trends

Shares of Snap (SNAP) are falling after two analysts cut their price targets for shares to $7 citing decelerating user trends. DECELERATING TRENDS: On Thursday, Evercore ISI analyst Anthony DiClemente lowered his price target for Snap to $7 from $9 given decelerating trends, management turnover, and competitive threats. The analyst told investors in a research note that he anticipates another quarter of sequential daily average user declines as competitive pressures in the wake of Snap's app redesign, along with the seasonally weak third quarter, drive DAUs lower by 1M quarter over quarter. Further, DiClemente believes that competition, particularly from Facebook's (FB) Instagram is "irreversibly" reducing Snap's opportunity to deliver on long-term investor expectations. The analyst added that revenue estimates for Q3 do not seem "overly demanding," however the stock is trading at the "loftiest" valuation in his coverage and it's difficult to argue that investors would forgive a continuation of declining user trends. He also notes that there is no evidence to suggest that Snapchat is significantly expanding the pool of advertisers beyond its current base. DiClemente said given the lack of positive catalysts in the face of declining users, decelerating revenue growth and management turnover ahead of seasonally critical Q4, he is lowering his price target. He reiterated an Underperform rating on Snap's shares. MAINTAINING SELL: Despite the 44% decline in shares year-to-date, Citi analyst Mark May kept a Sell rating on Snap, but again lowered his estimates to reflect recent trends in user and average revenue per user growth, Q3 guidance and a projected 2018 exit growth rate. This results in May cutting his price target for the shares to $7 from $8. In support of his Sell rating, May cited the company's recent executive departures, user trends in Q2 and continued operating losses. Further, May told investors in a research note of his own that he believes consensus 2019 revenue forecasts still appear too high and that Snap could be forced to raise additional capital in 2019 or 2020 without meaningful changes in revenue growth and/or operating leverage. He pointed out that despite the recent share price declines, short interest in the name has continued to rise and that Snap "still trades at a premium to most comps." WHAT'S NOTABLE: In a September 10 SEC filing, Snap said its chief strategy officer Imran Khan would depart the company to pursue other opportunities. Khan will continue to serve as chief strategy officer for an interim period to assist with an effective transition of his duties and responsibilities, Snap said, adding that Khan's last day has "not been determined." PRICE ACTION: Snap dropped 6.5% to $7.69 in morning trading.

SNAP

Snap

$7.76

-0.46 (-5.60%)

FB

Facebook

$160.71

-1.76 (-1.08%)

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SNAP Snap
$7.76

-0.46 (-5.60%)

10/04/18
SBSH
10/04/18
NO CHANGE
Target $7
SBSH
Sell
Citi cuts Snap target to $7, keeps Sell rating despite 44% pullback
Despite the 44% decline in shares year-to-date, Citi analyst Mark May keeps a Sell rating on Snap. The analyst again lowered his estimates to reflect recent trends in user and average revenue per user growth, Q3 guidance and a projected 2018 exit growth rate. This results in May cutting his price target for the shares to $7 from $8. Snap closed yesterday up 1c to $8.23. In support of his Sell rating, May cites the company's recent executive departures, user trends in Q2 and continued operating losses. Further, he believes consensus 2019 revenue forecasts still appear too high and that Snap could be forced to raise additional capital in 2019 or 2020 without meaningful changes in revenue growth and/or operating leverage. He points out that despite the recent share price declines, short interest in the name has continued to rise and that Snap "still trades at a premium to most comps."
10/04/18
EVER
10/04/18
NO CHANGE
Target $7
EVER
Underperform
Snap price target lowered to $7 on decelerating trends at Evercore ISI
Evercore ISI analyst Anthony DiClemente lowered his price target for Snap to $7 from $9 given decelerating trends, management turnover, and competitive threats. The analyst anticipates another quarter of sequential DAU declines, as competitive pressure in the wake of Snap's app redesign along with the seasonally weak Q3, drive DAUs lower by 1M quarter over quarter. Further, DiClemente believes that competition, particularly from Facebook's (FB) Instagram is "irreversibly" reducing Snap's opportunity to deliver on long-term investor expectations. He reiterates an Underperform rating on Snap's shares.
09/25/18
RHCO
09/25/18
NO CHANGE
RHCO
Hold
Snap partnership positive but unlikely to lead to Amazon takeover, says SunTrust
SunTrust analyst Youssef Squali noted that NYU professor Scott Galloway opined in an LA Times article that Snap's (SNAP) newly-announced partnership with Amazon (AMZN) could lead to an acquisition, but the analyst does not believe Amazon is a likely suitor for Snap for "a whole host of reasons." Among those, Squali said Amazon's ad business is already much larger than Snap's and an acquisition of a "challenged social platform would be distracting." Also, he believes the two companies "could not be any more different" culturally and notes that an acquisition of this type and size would be "unprecedented" for the e-commerce giant. While he sees the agreement as a win-win relationship and a positive for Snap, Squali maintains his Hold rating on the photo app owner's shares.
09/25/18
JPMS
09/25/18
NO CHANGE
JPMS
Overweight
JPMorgan sees 'meaningful pressure' on Facebook shares from Instagram departures
JPMorgan analyst Doug Anmuth says the "surprising" departure of Instagram co-founders Kevin Systrom and Mike Krieger is concerning and likely to put "meaningful pressure" on shares of Facebook (FB) in the near-term. The analyst believes Instagram has been a strong growth driver for Facebook and has played a critical role in retaining younger users within the company's group of platforms and in competing with Snap (SNAP). While the exact rationale for the co-founders' departure is unclear, various press reports suggest it is related to Facebook management recently exerting more control over Instagram, Anmuth tells investors in a research note. The analyst has an Overweight rating on Facebook. The stock in premarket trading is down 2%, or $3.71, to $161.70.
FB Facebook
$160.71

-1.76 (-1.08%)

10/03/18
ARGS
10/03/18
NO CHANGE
Target $210
ARGS
Buy
Facebook price target lowered to $210 from $237 at Argus
Argus analyst Joseph Bonner lowered his price target on Facebook to $210 after its last week's disclosure that a security breach resulted in compromised personal information of 50 million user accounts. The analyst states however that the headlines of a "massive security breach" may be excessive, since it is not clear whether any accounts were misused, adding that fears of a massive fine may also be exaggerated as Facebook reported the breach within the GDPR-mandated 72-hour window. Bonner keeps his Buy rating on Facebook in spite of its "challenging" near-term outlook thanks to its "dominant" position in the social media space as well as impending monetization of its Instagram, Messenger, and WhatsApp platforms.
10/02/18
10/02/18
NO CHANGE

Fly Intel: Today's top analyst calls on Wall Street
Check out today's top analyst calls from around Wall Street, compiled by The Fly. GE UPGRADED AT RBC, WOLFE: RBC Capital analyst Deane Dray upgraded General Electric (GE) to Outperform from Sector Perform and raised his price target for the shares to $15 from $13. The analyst believes a floor has been put in the shares following news of Larry Culp being named Chairman and CEO. Additionally, GE was upgraded to Outperform from Peer Perform at Wolfe Research. DEUTSCHE SEES HEIGHTENED RISKS TO FACEBOOK ESTIMATES: After attending the first day of AdWeek, Deutsche Bank analyst Lloyd Walmsley sees heightened risk to the Q3, Q4 and 2019 consensus estimates for Facebook (FB). The analyst said he's starting to hear more cautious feedback and that Facebook seems on the defensive, particularly following last week's data breach disclosure. Walmsley, however, continues to view Facebook as attractively valued and kept a Buy rating on the shares with a $205 price target. JPMORGAN ADDS WEIGHT WATCHERS TO FOCUS LIST: JPMorgan analyst Christina Brathwaite added Weight Watchers (WTW) to her firm's America's Analyst Focus while keeping an Overweight rating on the shares with a $120 price target. The stock's 30% pullback from its peak on June 20 presents a "compelling entry point for investors who missed the stock's appreciation the first time around," Brathwaite said. Despite the post-earnings selloff, the analyst believes the Q2 print was actually indicative that Weight Watchers' growth story remains on track. Further, she believes the changes announced last week, including its new rewards program, as well as the company's Invite a Friend program, will help drive member recruitment and retention going forward. AMBEV DOUBLE DOWNGRADED BY UBS: UBS analyst Alan Alanis double downgraded Ambev (ABEV) to Sell from Buy and lowered his price target for the shares to R$17 from R$23. AmBev trades at a 25% higher valuation than parent company AB InBev (BUD), which is unwarranted, Alanis believes. He believes Ambev shares at current levels are more than pricing in the company's favorable outlook. Further, he expects consensus estimates to come down due to a tougher competitive environment, a "tepid" Brazilian economic recovery and currency headwinds. DEUTSCHE DOWNGRADES METAL STOCKS: Deutsche Bank analyst Jeremy Kliewer downgraded Century Aluminum to Hold from Buy and lowered his price target for the shares to $15 from $20, stating that Century's margins could remain pressured for longer due to alumina supply disruptions. Meanwhile, Deutsche's Chris Terry downgraded Reliance Steel (RS) to Hold from Buy and lowered his price target for the shares to $90 from $100, and downgraded U.S. Steel (X) to Hold from Buy and lowered his price target for the shares to $35 from $47. The analyst said his view on the steel sector is "moderating post peak pricing." Most positive data points and catalysts have now largely played out, Terry believes.
10/02/18
DBAB
10/02/18
NO CHANGE
Target $205
DBAB
Buy
Deutsche Bank sees heightened risk to consensus Facebook estimates
After attending the first day of AdWeek, Deutsche Bank analyst Lloyd Walmsley sees heightened risk to the Q3, Q4 and 2019 consensus estimates for Facebook. The analyst says he's starting to hear more cautious feedback and that Facebook seems on the defensive, particularly following last week's data breach disclosure. Walmsley, however, continues to view Facebook as attractively valued and keeps a Buy rating on the shares with a $205 price target. The stock in early trading is down 93c to $161.51.
10/01/18
DADA
10/01/18
NO CHANGE
Target $36
DADA
Buy
Applied Optoelectronics price target lowered to $36 from $54 at DA Davidson
DA Davidson analyst Mark Kelleher lowered his price target on Applied Optoelectronics (AAOI) to $36 after its negative Q3 pre-announcement, stating that at its projected revenue rate it will be difficult for the company to show a profit. The analyst notes that the company's quality control issue was related to 25G lasers that led to suspended shipments of transceivers to a "single customer", adding that the entity was likely Facebook (FB) with whom Applied Optoelectronics has a $125M transceiver contract. Despite the pre-announcement, Kelleher keeps his Buy rating on the shares longer term, saying that as "one of the leading providers of optical networking technology to the datacenter and cable TV markets", the company is " well positioned to benefit from the growing dominance of 'hyperscale' data centers".

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LLY

Eli Lilly

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TOT

Total

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Kemper

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CRM

Salesforce

$148.26

0.86 (0.58%)

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Intuit

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CRM

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0.86 (0.58%)

INTU

Intuit

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PVTL

Pivotal Software

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0.01 (0.07%)

CBLK

Carbon Black

$24.52

1.77 (7.78%)

HPQ

HP Inc.

$18.91

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RAVN

Raven

$31.36

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VMW

VMware

$148.15

0.11 (0.07%)

ROST

Ross Stores

$107.31

1.63 (1.54%)

GPS

Gap

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0.79 (4.66%)

HAS

Hasbro

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TLND

Talend

$39.24

0.12 (0.31%)

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BA

Boeing

$354.47

14.44 (4.25%)

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Periodicals
FAA intends to test Boeing MAX software on newer pilots, Reuters says »

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DB

Deutsche Bank

$7.17

0.155 (2.21%)

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Deutsche Bank to pay $16M to settle corruption charges with SEC, Reuters says »

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S&P 500

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SPDR S&P 500 ETF Trust

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Kudlow says U.S., Chinese negotiators held productive trade talks, Reuters says »

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S&P 500

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GOOG

Alphabet

$1,188.53

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Alphabet Class A

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Alphabet Class A

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FB

Facebook

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TWTR

Twitter

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NUAN

Nuance

$17.31

-0.14 (-0.80%)

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CRM

Salesforce

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0.86 (0.58%)

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RVLT

Revolution Lighting

$0.34

-0.0124 (-3.57%)

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IBKC

Iberiabank

$70.16

-0.38 (-0.54%)

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RMNI

Rimini Street

$4.77

-0.11 (-2.25%)

, ORCL

Oracle

$53.18

-0.08 (-0.15%)

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RMNI

Rimini Street

$4.77

-0.11 (-2.25%)

ORCL

Oracle

$53.18

-0.08 (-0.15%)

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CRM

Salesforce

$148.26

0.86 (0.58%)

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AAC

AAC Holdings

$0.60

-0.0327 (-5.17%)

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General news
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HPQ

HP Inc.

$18.91

-0.04 (-0.21%)

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TRPX

Therapix Biosciences

$2.35

(0.00%)

17:27
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GLD

SPDR Gold Shares

$141.38

-0.36 (-0.25%)

17:26
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VMW

VMware

$148.15

0.11 (0.07%)

17:19
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17:19
Earnings
VMware sees Q3 adjusted EPS $1.42, consensus $1.57 »

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CRWD

Crowdstrike

$93.04

-3.5 (-3.63%)

, CBLK

Carbon Black

$24.52

1.77 (7.78%)

17:14
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Crowdstrike lower after Carbon Black acquisition »

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CRWD

Crowdstrike

$93.04

-3.5 (-3.63%)

CBLK

Carbon Black

$24.52

1.77 (7.78%)

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