Snap sinks on Cowen downgrade, price target cut over worries from iOS changes
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Snap (NYSE:SNAP) is getting a downgrade and a steep price target cut from Cowen, as the investment firm is deeply concerned over lingering issues related to the changes Apple (NASDAQ:AAPL) made as part of its iOS 14.5, which could hurt Snap's measurement and targeting, as well concerns that the company is running up against difficult comps.

Analyst John Blackledge lowered his rating to market perform, down from outperform, and cut his price target to $45 from $75, noting that Apple's Identifier for Advertisers, or IDFA, hurt the company's third-quarter results and there is concern that Snap (SNAP) will have to deal with that for several quarters, citing data from a recent ad buyer survey.
"We surveyed 54 US ad buyers in Dec '21 to assess upcoming Digital ad trends," Blackledge wrote in a note to clients. "As it relates to iOS 14.5 changes, the respondents said there are noticeable declines in ROI, challenges regarding attribution and measurement and less ability to re-target consumers, among other things."
Snap (SNAP) shares are sinking in early Thursday, losing more than 3% to trade at $41.38.
In addition, Blackledge found that 63% of respondents from the survey said they expect targeting and measurement challenges relating to iOS 14.5 to last at least six months, with 39% expecting slower or declining ad spend growth in 2022.
Some companies may benefit from the changes, Blackledge concedes, such as Google (NASDAQ:GOOGL), YouTube, TikTok (BDNCE) and Amazon (NASDAQ:AMZN), but Snap (SNAP), Instagram (NASDAQ:FB) and app stores are not expected to benefit.
The analyst also noted that Snap (SNAP) is likely to face tough comparisons in the first half of the year, as it saw 66% and 116% growth in the first and second quarters. He expects growth to decelerate to 30.1% in Q1 2022 and 17.9% in Q2, before rising back to the mid-20s in the second half of the year.
Earlier this month, Jefferies noted that Snap (SNAP) is likely to face some pressures in the first part of 2022, but it could accelerate revenue growth in the second half of the year, noting it has multi-billion opportunities in Maps and Spotlight.