(Bloomberg) -- A Morgan Stanley analyst admits he missed the boat on Reddit Inc.’s huge post-initial public offering gains. Yet he feels there’s still time to jump aboard.
Having held an equal-weight recommendation on the social media company since starting coverage in April, analyst Brian Nowak upgraded the stock to overweight, bringing him into line with the majority of peers. He also almost tripled his price target, taking it from the lowest to the highest on the Street.
“We have been wrong on the sidelines with Reddit year-to-date,” Nowak wrote in a note. “But as we look ahead to 2025, we don’t think we have fully missed this scaling platform that is rapidly shipping its pipeline of engagement and advertising initiatives.”
Shares in Reddit gained 2.7% Monday to close at $167.17, a fresh record.
Nowak’s new price target of $200 implies 23% upside to Friday’s close and would build on a 400% surge since the stock listed at $34 a share in March. The shares had their best month in October, rising 81% as Reddit’s results and forecast beat expectations in a sign that its investment in advertising technology is paying off.
Still, it remains early days when it comes to the company’s opportunity to grow users, time spent on its platform and advertising revenue, Novak said.
--With assistance from Subrat Patnaik.
(Updates with shares at market close.)
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