Snap rises as BofA reiterates buy rating after leaked memo shows constructive 2023 targets
Carl Court

Snap (NYSE:SNAP) shares rose on Thursday as investment firm Bank of America reiterated its buy rating on the camera company, noting that the positivity in Chief Executive Evan Spiegel's leaked memo is encouraging.
Analyst Justin Post noted that the memo, which mentioned growing daily active users to 450M, generating $6B in revenue, $1.5B in adjusted EBITDA and more than $1B in free cash flow could be seen as a stretch, they are nonetheless, a positive, given all the company has faced in recent memory.
"More favorable macro conditions may be necessary to achieve these targets, but with August revenue growth at 12-15% estimated, Snapchat Plus is likely seeing better-than-expected traction, and easier revenue growth comps ahead, a material macro improvement may not be necessary to achieve Snapâs goals," Post wrote in a note to clients.
Snap (SNAP) shares gained 1% to $11.57 in premarket trading.
Also of note in the memo written by Spiegel were the company's augmented reality ambitions, as it looks to grow AR-related advertising to be at least 10% of ad revenue by 2023. Snap (SNAP) also wants to increase user interaction with AR features to 1B monthly active users, while also integrating the capabilities of a number of services, including Lens Studio, Lens Engine, Lens Cloud and Snap OS with Spectacles.
"Revenue aspirations for 2023 suggest that advertisers are likely shown positive interest in Snapâs AR technology," the analyst posited.
Post noted that it's of great concern that an economic recession that could spill over into the first-half of next year, while also dealing with a disruption in sales execution and increased competition from ByteDance's (BDNCE) TikTok and Meta Platforms (META). 
However, any potential restrictions on TikTok could be "a potential upside tail catalyst" for Snap (SNAP), the analyst explained.
Last week, Snap said (SNAP) it would cut 20% of its workforce and step back from several projects, while focusing on revenue growth, community growth and augmented reality.