UBS downgrades Snap after earnings, says rising competition will keep pressure on stock

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UBS' downgrade comes after Snap reported its fourth-quarter results. Earnings came in slightly above estimates, but revenue was lighter than expected.

Snap may have trouble keeping up with ever-rising competition going forward, according to UBS. Analyst Lloyd Walmsley downgraded the social media company to neutral from buy. He also reiterated a price target of $10, which implies downside of 13.5% from Tuesday's close, and trimmed his 2023 revenue outlook on Snap. "We see increasing competition everywhere," analyst Lloyd Walmsley wrote in a client note on Wednesday.

In a letter to investors, Snap also called 2022 a "challenging year" that was marked by "macroeconomic headwinds, platform policy changes, and increased competition," as a slowing economy led businesses to slash their digital ad budgets and Apple's iOS privacy update limited targeting capabilities. Other analysts also grew more cautious on the stock after Snap's latest quarterly report. Goldman Sachs lowered its price target on the stock to $8 per share from $10.

 

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