Engagement trends for social media platforms improved sequentially in the third quarter, KeyBanc Capital Markets said, citing its quarterly consumer survey.
Pinterest Inc. PINS and TikTok, however, were the only platforms to see year-over-year growth as well, the firm said.
Impressed With Meta's Opex Discipline: Meta Platforms Inc. META, KeyBanc said, has been swift with its cost reduction. Reports of at least a 10% operating expenditure reduction at Meta reflected the ongoing efforts to realign revenue and expense growth amid challenges from forex, the economy and advertiser signal loss, it added.
“Given we are unlikely to have a true read on the underlying engagement until Meta laps the broader short-form video rollout, we see few near-term catalysts,” analyst Justin Patterson said in a note.
Snap To Remain Volatile: Snapchat parent Snap Inc.’s SNAP results are likely to remain volatile over the near term, Patterson said. The company appears increasingly penetrated among younger demographics, he added.
Content initiatives such as Discover and Spotlight are yet to show evidence of gaining traction with older users, KeyBank said.
“Net we believe Snap faces a difficult challenge of improving the user experience,” it added.
Pinterest Most Promising: KeyBanc said it remains encouraged around the positioning of Pinterest and its improving executive story.
Despite the murky macroeconomic backdrop, Pinterest may have benefited from its heavy U.S. exposure, heavy e-commerce and consumer packaged goods and larger merchant exposure, Patterson said.
Pinterest will likely have a solid near term, thanks to its holiday marketing campaign and optionality to dial back creator pin, he added.
“2023 continues to screen as a year for new CEO Bill Ready to execute on user re-engagement and monetization initiatives,” KeyBanc said.
TikTok Gains Slowed: Giant killer TikTok set a new high but its growth has slowed across demographics, Patterson said.
The slowdown could bode well for rivals Snap and Meta but to quell competitive fears, these platforms may have to show improved revenues, the analyst said.
Twitter: Twitter Inc.’s TWTR engagement is largely dependent on news events, KeyBanc said. The platform, according to the firm, could face challenges in attracting younger and older users.
- KeyBanc has an Overweight rating and $28 price target for Pinterest.
- The firm rates Meta an Overweight with a $196 price target.
- The firm’s ratings on Snap and Twitter remain Sector Weight.
Price Action: According to Benzinga Pro data:
- Meta closed Friday's session down 1.69% at $140.41.
- Snap lost 1.34% before closing at $10.32.
- Pinterest slumped 2.67% to $22.59.
- Twitter added 0.43% to $41.58.
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