Bank of America analyst Justin Post downgraded shares of Snap Inc.
and Pinterest Inc.
to neutral from buy Monday, writing that while the two internet companies could continue to see strong growth, their stocks could fall out of favor as the economy recovers. Snap shares are off 5.8% in Monday morning trading while Pinterest shares are down 2.5%. “We continue to see Snap and Pinterest as strong secular growers, expect strong 1Q channel checks to aid stocks ahead of 1Q results, and anticipate acceleration in growth in 2Q, but we think investors may becoming increasingly concerned on tougher 2H comps, especially in context of a broader economy that should be accelerating,” Post wrote. At the same time, he upgraded shares of Booking Holdings Inc.
to buy from neutral, arguing that the company could be the top beneficiary of Europe’s vaccine rollout by the third quarter, among the companies that he covers. He points to “several green shoots for U.S. travel” and an expectation that Europe and the rest of the world could kick off similar recovery paths. Booking shares are up 1.5% in Monday morning trading. They’ve gained 13% over the past three months as the S&P 500
has risen about 7%.