Snap's (SNAP) New Amazon (AMZN) Partnership Unlikely to Lead to a Takeout - SunTrust Robinson Humphrey

(Updated - September 25, 2018 11:38 AM EDT)

(updated to expand analyst comments)

SunTrust Robinson Humphrey analyst Youssef Squali weighed in on Snap Inc (NYSE: SNAP) following the announcement of a partnership with Amazon (NASDAQ: AMZN).

Squali said the partnership is a positive, but won't likely lead to a takeout. He listed the following reasons:

1. Amazon Does Not Need SNAP. "Amazon's ad business is already much larger than Snap's, and has been growing very rapidly of late...," he commented.

2. Cultural Mismatch.

3. No Historical Precedent. "An acquisition of this type and size would be unprecedented for Amazon," he commented.

"We believe the simple explanation for the recent partnership is that it amounts to a win-win relationship, a lead-gen opportunity for Amazon, tapping into Snap's younger audience, and a new high margin, ecommerce revenue stream
for Snap, complementing its ad business," he added.

The firm maintained a Hold rating and price target of $13.00

For an analyst ratings summary and ratings history on Snap Inc click here. For more ratings news on Snap Inc click here.

Shares of Snap Inc closed at $8.95 yesterday.

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