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Several major Wall​ Street⁤ firms have initiated coverage⁤ of Reddit, the social media company that made⁢ its stock market debut on March 21.‌ The stock ⁤experienced a 48% surge on its first⁤ day, closing at ⁢$50.44. As of the close of trading on Friday, Reddit’s stock ​has seen​ a ⁤24% increase from its initial⁣ offering price ⁤of $34 ‍per share. However, it’s ⁢worth noting‌ that‍ Reddit opened at $47 per share when it first started trading last month, meaning investors who bought at that price have already experienced a 10% loss.

Major Banks Adopt Wait-and-See ‌Approach

Several notable banks,⁣ including JPMorgan, have adopted a ⁢wait-and-see approach as they begin their coverage of Reddit. JPMorgan analyst Doug Anmuth stated, “We ​recognize that there is likely upside to near-term numbers, but we ⁢remain on the⁤ sidelines.” Anmuth, who rated ⁢the⁢ company as neutral and set a price‍ target of $47, is keeping a close eye on several metrics, ​including Reddit’s traction in the online ad ​space.

Goldman Sachs and Morgan Stanley ‌have also issued neutral ‌ratings on Reddit. These three banks, along with Bank of America, were the lead ⁣underwriters of Reddit’s public offering. Goldman analyst Eric ‍Sheridan highlighted several long-term‌ growth themes, including artificial intelligence, digital⁤ advertising, and the growth of​ the creator economy. However, he believes near-term obstacles may dampen‌ these⁣ catalysts.

Other Analysts Offer More Optimistic ⁢Outlooks

Analysts from Citi and Deutsche Bank‍ have more optimistic near-term outlooks for ‌Reddit. Citi analyst Ronald Josey’s⁢ price target of $53, which forecasts a⁣ 25% upside, is among the highest on the⁤ Street. Josey acknowledges ‍Reddit’s current challenges but believes these ⁣are outweighed⁣ by the⁢ platform’s catalysts, including improving engagement trends and​ monetization,⁤ expanding margins, and data licensing opportunities.

Deutsche Bank analyst Benjamin⁢ Black cited many of ‌the same catalysts as‌ the reasoning behind his $50⁣ price target, which corresponds ⁣to an 18% gain. “We think Reddit is on⁤ the early end of a number of positive inflections,” ⁣the analyst wrote.

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Her Forward is a US news publication founded by Michael Peres (Mikey Peres) in 2021. Our publication is dedicated to bringing you the latest news and insights on female entrepreneurs and leaders.