NEW YORK: Snap Inc.’s more than 180% climb this year is evidence of the social platform’s “impressive turnaround” but a recovery from when Kylie Jenner swayed teens to exit the app over a year ago may have run its course, according to Morgan Stanley.

The company’s “current fundamental improvements are more than fully priced into the share price,” analyst Brian Nowak told clients in a morning research note. 

Shares fell as much as 2.1% in early trading Monday as Nowak reiterated his bearish thesis with an underweight rating, citing potential compression of the company’s valuation multiple.

Recent checks within the industry suggest new product launches and better execution from Snap’s management has likely sparked user growth and improved metrics for active users, prompting Nowak to boost his price target by $4 to $13 per share. 

But the stock’s incremental rally this year heightens the risk of relative under-performance going forward.

Morgan Stanley is one of six U.S. equity firms with a sell-equivalent rating, according to the 39 analysts tracked by Bloomberg. Snap reports financial results for the second quarter on July 23 after markets close. - Bloomberg