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  • Snap’s stock price is slipping on Monday after the company was downgraded by Jefferies.
  • Jefferies prefers Facebook in the social media landscape.
  • Snap’s new app redesign may not have the desired effect and could turn users away from publishers’ content.
  • Watch Snap’s stock price in real time here.

Snap is trading down 1.31% to $14.31 on Monday after Jefferies downgraded the stock from a buy to a hold.

Snap achieved the $14.50 price target Jefferies had set, which was one reason for the downgrade. Brent Thill, an analyst at Jefferies, said it will take time to see if the company’s new app design will bring the promised boost to ad sales and user interaction.

Snap recently announced a major redesign of its app, but the new design has yet to go live to all users. The overhauled app more clearly separates content by users’ friends from content by brands and celebrities.

Thill has spent time with the redesigned app and doesn’t think the separation of branded and personal content will ultimately be good for Snap. He said engagement in the new app is flat for personal content but has declined for brand content, since the two are now in different sections.

“Improvements continue on the ad tech stack which have been welcomed by advertisers, but budgets continue to be in a test mode until greater conversion can be proven,” Thill said in a note to clients on Monday.

Thill summed up the current social media landscape by saying “in social we prefer the clear leader in Facebook. … Snap is now trading at ~11x our ’18 Rev estimate which we see as fully valued.”

Cowen downgraded the stock last week after a survey of senior ad buyers revealed that 96% of them would prefer to advertise on Instagram, as opposed to Snap. The stock slipped on the news.

Snap is down 20.7% from its IPO price of $17.

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