Guggenheim Securities analyst Michael Morris on Monday upgraded his stock ratings on Snap and Spotify after "revising our valuation framework for our digital media coverage universe to better reflect comparability with peer companies in the software industry."
The analyst also boosted the stock price targets for Netflix and other major internet firms.
He explained that "there are greater similarities between internet and software companies, including core investment in research & development and engineering resources, and creation of high-utility technology platforms, than is implied in current valuations." He added: "In the case of mega-cap companies Alphabet and Facebook, we are valuing relative to Microsoft, which we believe is most similar in terms of size, business diversity, research and development investment and potential investor base." Concluded Morris: "We expect investors will continue to evolve their view to reflect this, driving incremental appreciation for internet shares."