Snap stock flopped Thursday as an equity analyst downgraded the social media company due to lingering concerns over changes Apple (AAPL) made to its operating system last year.
Cowen analyst John Blackledge slashed his price target on Snap (SNAP) to 45, from 75. He also downgraded Snap stock to market perform, from outperform.
Snap stock plunged 6.6% to 39.90 during morning trading on the stock market today.
Impact Of Apple Changes To Snap Stock
The changes to Apple’s iOS, version 14.5, kicked in last April and changed the rules of mobile advertising by giving more power to users over privacy controls. The changes made it more difficult for advertisers to deliver personalized ads and measure ad interactions for additional targeting.
Cowen said it surveyed 54 U.S. ad buyers in December to assess digital ad trends as it relates to the Apple iOS changes.
“The respondents said there are noticeable declines in return on investment, as well as challenges regarding attribution and measurement and less ability to re-target consumers,” among other things, Blackledge wrote in a note to clients.
Advertisers found it more difficult to reach their target audience and measure ad impact.
“Other respondents stated that they are still in the early innings of finding effective tactics to mitigate the challenges, with some citing a shift onto other platforms such as Android and Connected TV,” said Blackledge.
Snap Challenges Expected To Persist
About 45% of respondents said they expect the challenges to persist for at least 12 months. About 30% of respondents expect to reallocate ad spending. Google search is set to be the top beneficiary.
Last week, Etsy was named a top stock pick for 2022.
However, social media stocks have been on a roller-coaster ride over the last year. Etsy, along with Snap, Pinterest and other social media stocks, have dropped significantly since late October for various reasons.
Apple stock dipped 0.4% to 174.75.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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