Jefferies unconfident across digital advertising sector

Integral Ad Science Holding

24/05/2022 07:47

** Jefferies says macro environment for the whole digital
advertising industry is rapidly deteriorating
    ** Adds social media company Snap Inc's  SNAP.N  Q2
pre-anouncement indicates a sharp deceleration in ad revenue
    ** SNAP said the economy had worsened faster than expected
in the last month and the social media company slashed its
quarterly forecast, triggering an after-hour sell-off
 urn:newsml:reuters.com:*:nL2N2XG013
    ** Brokerage says it is highly unlikely that the weakness is
isolated to SNAP, and adds that it sees deteriorating marco
conditions to impact other digital ad names, such as Meta
Platforms Inc  FB.O , Alphabet Inc  GOOGL.O , and Twitter Inc
 TWTR.N  
    ** "While many investors were aware of the softening digital
ad market, the magnitude of the deceleration is surprising given
updated guidance implies that rev growth could slow to low teens
y/y growth or worse in May/June" - Jefferies
    ** Jefferies reduces its digital ad coverage's FY22 and FY23
rev estimates by an average of 3.2% and 5.5%, respectively,
given the ongoing macro uncertainty 
    ** Brokerage also cuts PT for SNAP, FB, GOOGL, TWTR

    
    

 (Reporting by Subhadeep Chakravarty in Bengaluru)
 ((subhadeep.chakravarty@thomsonreuters.com))