Redburn upgrades Snap to Buy with $10 target on subscription pivot

Shares of Snap Inc. (SNAP) pushed meaningfully higher on 27 April 2026 following an upgrade by Redburn Lippmann, which raised its rating to Buy and doubled the price target to $10. The investment firm's research note indicates this move signals potential upside of nearly 65 per cent from current levels, challenging the stock's 100-day moving average immediately after the announcement.

Redburn's bullish stance is rooted in the company's strategic pivot away from a pure-play advertising model toward a premium subscription service known as Snapchat+. Analysts project that subscription revenue will more than double to $1.75 billion within the next three years. This shift is expected to increase Snapchat+'s share of total sales from 13 per cent to 22 per cent, offering a more predictable and recurring cash flow that could insulate the business from the volatility often associated with digital advertising markets.

Beyond the subscription growth, the upgrade highlights management's focus on sustainable earnings through aggressive cost-cutting measures and a pivot to an AI-enabled operating model. These operational efficiencies are designed to push gross margins above 60 per cent. Redburn notes that the company achieved breakeven on a GAAP basis last year, a figure that excludes experimental hardware ventures such as Spectacles.

Looking ahead, the firm forecasts that Snap will become meaningfully profitable in 2026. The company is currently trading down approximately 30 per cent from its year-to-date high. Analysts view a decisive break above $6.20 as a critical technical signal that would indicate shifting long-term momentum in favour of buyers, suggesting a potential inflection point for the stock.

While Redburn's outlook is optimistic, the broader analyst consensus remains cautious. The prevailing rating across the market sits at Hold, with a mean price target of approximately $7.99. This suggests roughly 30 per cent upside from current levels, though it falls short of Redburn's more aggressive $10 objective.

The divergence in sentiment underscores the uncertainty surrounding the execution of the Snapchat+ growth strategy, which has not yet been fully realised at the projected scale. Furthermore, the timeline for meaningful profitability in 2026 relies heavily on sustained cost reductions and margin expansion, with the inclusion of hardware ventures in future financials potentially altering the profit trajectory.