UBS Upgrades Snap To Neutral, Doubles Price Target To $16 From $8

UBS analyst Eric Sheridan upgraded Snap (SNAP) to Neutral from Sell and doubled his price target for the shares to $16 from $8.

The stock in premarket trading is up 11%, or $1.61, to $16.44.

Last night's earnings report showed "across the board progress" on all three key debates - user growth, revenue, and leverage, Sheridan tells investors in a research note.

As a result, the analyst says he "must acknowledge the turnaround" in Snap's underlying operating trends. However, with the stock up ~190% over the last six months, and Snap not reaching long-term profitability in his model until fiscal 2021, Sheridan still views the valuation as "challenging."