$100 Million Deal That Will Make Snap Inc Great Again?


Yesterday, Snap Inc (NYSE:SNAP) signed a “big” $100 million deal with Time Warner, agreeing to broadcast up to 10 original shows per year and advertisements, created by the entertainment company, on Snapchat app for two years.

In reaction, Drexel Hamilton analyst Brian White reiterates a Buy rating on SNAP shares, with a price target of $30, which represents an upside circling 68% compared to where the shares last closed.

According to the Wall Street Journal, the social network giant inked yesterday a deal which is “one of the largest show development deals Snap has landed to date and shows how Snap is attempting to reinvent television for young, mobile users.”

The analyst highlights the “ghastly levels” Snap has reached, especially considering its DAU growth and the constant pressure from its rival Facebook. However, the analyst firmly asserts this partnership is a buying opportunity for investors.

White concludes, “In our view, a deal of this size with one of the premiere media players highlights the power of Snapchat in reaching millennials.” The analyst continues, “We believe Snap’s cachet with millennials is a major differentiator and the company is introducing innovative ways for brands to tap into this cohort. For example, recent media reports indicate that McDonald’s is using Snapchat to recruit workers with “Snaplications” and Pepsi is using “Snapcodes” to promote Pepsi Fire.”

According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, White is ranked #194 out of #4573 analysts. The analyst has a 62% success rate and generates an annual yield of 10.2%. However, when recommending SNAP, the analyst earns 5.6% average loss on the stock.

TipRanks analytics show SNAP as a Hold. Based on 33 Wall Street analysts offering recommendations for this share, 12 issue a Buy, 16 maintain a Hold and 5 recommend a Sell. The 12-month average price target stands at $21.88, making a nearly 22% upside from where the stock is currently trading.