Sam Boughedda

Investing.com — This shares Snap Inc (NYSE:) fell more than 8 percent Monday, after Wedbush reduced the stock’s rating to neutral instead of outperform.

Analyst Ygal Aronian also reduced the price target for the shares of the social media company to $36, from $56.

Arounian cited TikTok’s increased competition and Identifier for Advertisers, (IDFA), as reasons for the rerating. 

“In our view we’ve seen little evidence of progress against IDFA since Snap reported 3Q earnings, with our checks indicating continued headwinds across digital advertising,” the analyst said.

Snap is unlikely to achieve revenue growth of 50% or more in the near future, but this has a significant impact on Snap’s ability. However, we are also seeing increased competition from TikTok and other companies, making us less cautious when weighing risk/reward, especially given high risk environments where multiples of growth are at risk.

Arounian said Snap is still strong among the younger generation and well-positioned for augmented reality. Wedbush considers this a great opportunity for advertisers. The analyst believes that the company can make more from Spotlight, Discover and Maps features. 

Morgan Stanley lowered Snap’s price target to $60 last week from $65