Investing.com - Shares of Snap Inc (NYSE:SNAP), the creator of messaging app Snapchat erased early gains to fall by around 3.23% in pre-market trade on Tuesday.
Shares had climbed over 2% ahead of the open earlier; building on strong gains in Monday’s trading session following a series of fresh analyst ratings from the underwriters of its IPO.
Shares erased gains following reports that Facebook (NASDAQ:FB) is planning to roll out a number of new features that will compete with Snapchat, including allowing users to add digital decorations to pictures.
Shares of Snap closed up 4.79% on Monday to end at $23.83 following the release of the ratings, after briefly rising above $24 for the first time since the stock’s third day of trading, on March 6.
Analysts from eight banks, including Citi, Goldman Sachs, Morgan Stanley, Credit Suisse, Jefferies and RBC Capital Markets, all underwriters of Snap's IPO, gave the stock buy ratings.
The ratings come after the required 25 day "quiet period" for the IPO underwriters.
RBC gave Snap an outperform rating and a $31 price target.
"Snap has become an innovation leader – for both consumers and advertisers – in arguably the single fastest advertising medium today – mobile. It has also emerged as one of the leading media platforms for millennials”, RBC said in a note.
Morgan Stanley gave Snap an overweight rating and price target of $28, while Citi gave it a buy rating and price target of $27.
Shares of Snap peaked around $27 shortly after its IPO earlier this month, before falling as low as $18.80 after analysts not related to the IPO mostly assigned neutral or negative ratings amid concerns over slowing user growth.