Guggenheim has upgraded Snap (NYSE:SNAP) from Neutral to Buy in a recent research note, along with a raised price target of $23 per share, up from $9. The investment bank anticipates that Snap shares are positioned for strong performance in 2024, driven by robust demand for digital advertising and improved relative returns for SNAP ad units.

The analysts at Guggenheim expect digital advertising demand to accelerate in 2024, leading to above-consensus revenue growth for the industry. They project that SNAP’s revenue growth will outperform, benefiting from the increased demand that will drive ad price hikes across the industry. Additionally, they foresee Amazon (NASDAQ:AMZN) Ads’ expanding ambitions and partnerships contributing to SNAP’s advertising growth, enhancing pricing power across the platform.

Guggenheim’s analysts emphasize that current consensus expectations may underestimate the pace of revenue growth in 2024 and beyond. Despite Snap shares already experiencing significant outperformance since 3Q earnings, the analysts maintain a positive outlook and anticipate sustained share outperformance, citing a favorable backdrop for Snap.