Snap surges after skeptic upgrades to buy citing stronger advertising

Shares of social media company Snap rallied more than 6 percent Thursday after one longtime skeptic upgraded the stock and told clients that it’s set for outperformance thanks to better advertising sales.

BTIG analyst Richard Greenfield now recommends investors buy the beat-up equity and thinks that the media sharing platform could see its shares soar 50 percent over the next 12 months.

“Your initial reaction is likely why now and what changed, as virtually everything that could go wrong for Snapchat over the past couple years since going public has gone wrong,” Greenfield began. “Performance advertisers are laser focused on return on investment and spend (and spend more) where they see a compelling return.”

“We are increasingly confident that overseas direct response/performance advertisers are taking advantage of low relative bid prices on ad inventory in the U.S.,” he added.

Revived advertising spend would likely come as a welcome reprieve for Snap investors, who’ve seen their shares sink as much as 70 percent from their IPO price within the past year before rebounding to $10.05. Greenfield has never had a buy rating on the shares, which went public in March 2017 at $17.