© Reuters. Loop Capital sees weaker guidance for digital ad stocks, cuts target
Loop Capital analyst Rob Sanderson told investors in a report on digital advertising platforms that they expect Snap (NYSE: ), Google (NASDAQ: ), Twitter (NYSE: ) : ), Meta (NASDAQ: ), Pinterest (NYSE: ) and year (NASDAQ: ).
Valuations for digital advertising platforms adjust across the board with the stock market, especially growth stocks, while the consensus view is that we’re going into a recession, if we haven’t already, real GDP fell 1.5 percent in the first quarter and growth continued to slow in the second quarter , Sanderson said.
“Fears of a looming recession were interrupted by Snap’s surprise announcement in late May. Google, Twitter, and Roku fared better, but social media peers Facebook and Pinterest fell sharply (19% and 18%, respectively, vs. 5%) ) since Snap’s warning – Snap is down 42%),” the analysts wrote.
Loop’s conversations with advertisers, agencies, digital platforms and channel players over the past few weeks have so far revealed no sign of a significant pullback in spending.
So far, Sanderson believes that macro pressures don’t appear to have much impact on ad spending or changes in the outlook.
“Whether we’re actually in a recession or a slowdown, we expect digital companies to give very modest guidance on their upcoming round of earnings calls, given limited visibility, ongoing supply chain issues and the ongoing Ukraine crisis, And wouldn’t be surprised” if a few choose not to provide guidance. Either silence or no guidance could be detrimental to the stock. “
The company cut its buy-rated Google price target to $2,765, its buy-rated Meta to $180 from $230, and its hold-rated Twitter to $43 from $51.