Stifel downgrades Snap to Sell as TikTok threat persists

Investing.com -- Stifel cut its rating on Snap Inc. to Sell from Hold, saying sustained competition from TikTok will continue to weigh on user growth and ad revenue through 2026.

Brokerage lowered Snap’s price target to $6.50 from $8.

Analysts said recent checks show Snap’s advertising trends worsening relative to rivals, while growing confidence that TikTok will remain in the U.S. removes a potential tailwind for the platform.

Stifel also trimmed its assumptions for Snap’s North American user growth and ad revenue, citing ongoing market-share loss.

Stifel said third-quarter trends improved from the prior period across digital advertising, with August and September showing particular strength despite tariffs and macro uncertainty.

The brokerage expects companies to deliver generally healthy fourth-quarter guidance, though not “overly robust,” given lingering concerns about consumer spending during the holiday season.

Stifel highlighted Meta Platforms as its top long-term pick, pointing to continued strength in Instagram and manageable spending risks tied to 2026 capital expenditures.

It also raised estimates for Pinterest, expecting solid third-quarter results and upbeat guidance, supported by user growth and improving advertiser engagement.

Analyst said trends for Alphabet’s YouTube remained positive, while search performance was mixed. It expects The Trade Desk to post a third-quarter beat but warned any stock gains may be short-lived without several quarters of consistent outperformance.

Stifel described the digital ads environment as “generally supportive,” with broad-based improvement in spending but ongoing pressure on smaller platforms such as Snap.

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