Shares of Snap Inc. (SNAP) are on the rise after Barclays analyst Ross Sandler upgraded the stock to Overweight, a buy-equivalent rating, as he sees 2018 as the turning point for Snapchat parent. The analyst argued that the app redesign could help the company and there may be a potential narrative change from Facebook (FB) being a Snap killer to the companies being able to co-exist.

BUY SNAP: In a research note to investors this morning, Barclays' Sandler upgraded Snap to Overweight from Equal Weight and raised his price target for the shares to $18 from $11. The analyst argued that Snap may start hitting or exceeding consensus revenue estimates and accelerating growth in 2018 now that the pricing transition is late stage. Furthermore, he believes there could be a potential narrative change from 2017's "Facebook is killing Snap" to 2018's "these companies can co-exist" like Priceline (PCLN)/Expedia (EXPE). Additionally, Sandler highlighted Snap's high short interest relative to peers, especially considering its founders own around 50% of the shares. Tencent's (TCEHY) open market purchases potentially marked a "floor" of about $14, he noted, adding that new ad units like Promoted Stories may add buzz to the story near-term. An app redesign could also help, given that both Twitter (TWTR) and Instagram benefitted greatly from the shift to algorithmic ranking of content, the analyst pointed out. Overall, Sandler believes the worst is behind Snap and the company is likely to get back on track in 2018.

NEW SNAPCHAT: Snap introduced a "new and improved Snapchat," Snap introduces 'new and improved' Snapchat. "Until now, social media has always mixed photos and videos from your friends with content from publishers and creators. While blurring the lines between professional content creators and your friends has been an interesting Internet experiment, it has also produced some strange side-effects - like fake news - and made us feel like we have to perform for our friends rather than just express ourselves. The new Snapchat separates the social from the media. This means that the Chats and Stories from your friends are on the left side of Snapchat, and the Stories from publishers, creators, and the community are on the right. We've also invented something new to make Snapchat feel even more personal: the dynamic Friends page. The new Friends page to the left of the camera displays your friends based on the way you communicate with them," the company said. Commenting on the app redesign, Deutsche Bank analyst Lloyd Walmsley told investors he views it as a positive step and a step in the right direction. The redesign came faster than expected and appears to make the user experience more intuitive, Walmsley argued. The analyst, however, noted he continues to hear "lukewarm" advertiser feedback and still sees intense competition for Snap. Further, he believes the redesign may be "too little, too late" for engaging older users. Walmsley remains cautious on Snap shares, with a Hold rating and $11 price target.

PRICE ACTION: In late morning trading, shares of Snap have gained almost 9% to $14.78.