Snap Stock Upgraded on Advertising Optimism

Wall Street is overwhelmingly bearish on Snap

Social media name Snap Inc (NYSE:SNAP) received some rare upbeat attention from the analyst community this morning. Citigroup upgraded its opinion on the security to "neutral" from "sell" and lifted its price target to $7 from $6, listing a number of potential positives for the company. To be more specific, Citi is expecting a new version of the Snapchat app for Android to come out soon, and also sees strong advertising growth going forward.

Most of Wall Street is seemingly negative on SNAP. There are 23 brokerage firms in coverage, and just two recommend buying the shares. Moreover, seven have "strong sell" recommendations. The average 12-month price target, meanwhile, is $7.84. With Snap last seen at $6.39, up 1.7% today, that represents a a nearly 23% premium to current levels.

Even with the stock grinding higher today, it remains below the 80-day moving average, a trendline that's sitting right above the current price and hasn't been topped since mid-August. The shares bottomed at $4.82 on Dec. 21.

Short sellers have taken action amid the equity's downtrend. Short interest represents 17.4% of the float, and going by average daily trading volume, it would take these bears more than seven sessions to cover. In a similar vein, put buying has picked up in recent weeks, according to Snap's 10-day put/call volume ratio of 0.94 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 76th annual percentile.