Snap shares soar as underwriters label the stock a 'buy'
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Snap (NYSE: SNAP [SNAP]) shares surged five percent yesterday after a number of its IPO underwriters rated the stock a "sell".

Yesterday eight banks involved in Snap's IPO gave it positive ratings, including JP Morgan and Goldman Sachs, leading the stock to put on 4.79 percent to close at $23.83.

Morgan Stanley analyst Brian Nowak started Snap with an "overweight" rating and a $28-price target.

"SNAP's engaged/hard-to-reach millennial users and unique video offerings should attract significant ad dollars," he wrote in a research note.

While Snap remains below its peak of $29 its stock has almost doubled in value since its debut at the start of the month.

Since that day shares in Snapchat's parent company have been on a roller coaster ride.

The app maker got off to a strong start, climbing as high as $29 the day after it listed at an IPO price of $17.

Things quickly went in the opposite direction, but while the stock went backwards it remained above its IPO price.

This was despite a number of commentators warning that the company may never turn a profit due to slowing user growth, widening losses and lack of voting rights for outside investors..

Last week the stock was given its first "buy" rating and rose above $20 on the news.

Monness, Crespi, Hardt put a price target of $25 on Snap, leading the shares to climb more than three percent last Friday.

"We recognize we are potentially giving too much credit for unproven skills in building a business, rather than just a product, but we see more to Snap than many suggest," analyst James Cakmak said in a note to investors.


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