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Investing.com - Wells Fargo (NYSE:WFC) lowered its price target on Snap Inc (NYSE:SNAP) to $7.00 from $11.00 on Wednesday, while maintaining an Equal Weight rating on the social media company’s stock. According to InvestingPro data, Snap currently trades at $9.39, with analysis indicating the stock is slightly undervalued based on its Fair Value assessment.
The price target reduction follows weaker-than-expected second-quarter trends and third-quarter guidance, prompting Wells Fargo to reduce its fiscal year 2025 and 2026 ad revenue forecasts by 3.5% and 6.5% to $5.21 billion and $5.62 billion, respectively. The company’s current revenue stands at $5.53 billion, with a 14.9% growth rate over the last twelve months.
Wells Fargo maintained its fiscal year 2025 non-GAAP operating expense forecast at approximately $2.65 billion, in line with company guidance, while revising its adjusted EBITDA forecasts to $532 million for FY25 and $635 million for FY26, down from previous estimates of $657 million and $911 million.
The bank noted that Snap’s strong position among the 13-25 demographic provides potential for success with its Spectacles mixed-reality glasses planned for 2026, which could unlock new monetization opportunities if effectively integrated into its social ecosystem.
Despite this potential upside, Wells Fargo expressed caution about Snap’s core application facing engagement pressure and competition from better-resourced rivals like Google (NASDAQ:GOOGL) and Meta (NASDAQ:META), which are also investing aggressively in mixed-reality technology. InvestingPro analysis reveals additional insights about Snap’s competitive position, with over 30 key metrics and 6 exclusive ProTips available for subscribers, including detailed financial health scores and peer comparison data.
In other recent news, Snap Inc has been the subject of several analyst reports following its second-quarter 2025 earnings release. The company reported advertising revenue growth of 4% year-over-year for Q2 2025, which led Citizens JMP to downgrade Snap’s rating from Market Outperform to Market Perform due to concerns over slowing ad growth. UBS also expressed concerns about advertising revenue growth, lowering its price target for Snap to $9.00 from $10.00, while maintaining a Neutral rating. In contrast, Evercore ISI raised its price target to $12.00 from $11.00, citing a rollforward of its valuation framework, despite describing the quarterly results as "surprisingly soft."
Goldman Sachs adjusted its price target for Snap to $9.00 from $8.50, maintaining a Neutral rating, and noted volatile revenues in Q2 2025. Raymond (NSE:RYMD) James reiterated its Outperform rating with a $10.00 price target, attributing Snap’s revenue miss to unexpected ad platform execution issues. These mixed analyst reactions reflect the varied perspectives on Snap’s recent performance and future prospects.
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