On Friday, Citi analyst Ronald Josey adjusted the price target for Snap Inc (NYSE: NYSE:SNAP), increasing it to $13.00 from the previous $11.00, while maintaining a Neutral rating on the stock. According to InvestingPro data, Snap currently trades at $11.61, with analyst targets ranging from $9 to $18.
The company has caught analysts' attention, with 14 analysts recently revising their earnings expectations upward. The revision follows recent developments within Splash Beverage Group, Inc., which indicated a potential for stronger revenue performance in the upcoming quarters.
Splash Beverage Group held a conference call earlier this week to discuss their third-quarter results for the year 2024, ongoing mergers and acquisitions (M&A) efforts, and updates on capital raises.
The company has experienced revenue pressures, having diverted funds from its e-commerce operations to support its beverage portfolio. Management has signaled a shift, beginning to reinvest in the e-commerce platform, which is expected to contribute to a revenue uptick in the fourth quarter of 2024 and into 2025.
Despite these positive moves, the company faces uncertainty regarding the timing of the financial boost as it awaits the completion of previously announced financing. Splash Beverage is also actively pursuing M&A opportunities, including the acquisition of Western Son Vodka and the signing of a letter of intent (LOI) to acquire an energy drink company. The successful completion of these deals is anticipated to significantly alter the company's financial landscape, enhance stability, and yield operational savings across its brand portfolio.
Management expressed confidence in securing proper funding and finalizing the M&A processes heading into 2025. However, due to the current lack of clarity on these timings, Citi has revised its revenue forecasts downward for 2024 and 2025, leading to a new price target of $0.50. Despite the lowered revenue forecast, Citi maintains a Buy rating on Splash Beverage, citing a favorable risk-reward scenario.
In other recent news, Snap Inc. has been the focus of positive outlooks and strong Q3 results. Loop Capital has raised its price target for Snap from $14 to $16, maintaining a Buy rating. This adjustment comes as the firm introduces its 2026 forecast, noting potential improvement in Snap's monetization due to user engagement growth and the rebuilding of measurement systems. The potential ban of TikTok in the United States was also cited as an "X-factor" for investor interest.
Snap reported a 15% year-over-year increase in Q3 revenue, totaling $1.37 billion, and a rise in daily active users to 443 million. This growth was attributed to the company's direct response advertising business and the Snapchat+ subscription service, with active advertisers more than doubling year-over-year.
Despite a 1% decline in brand-oriented advertising revenue, Snap announced a new $500 million share repurchase program and expects Q4 revenue to be between $1.51 billion and $1.56 billion.
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