Twitter Is Upgraded to Overweight by J.P. Morgan on Ad Strength

Digital advertising growth should accelerate next year, and Twitter stock should benefit the most, says J.P. Morgan.
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Twitter  (TWTR) - Get Report shares rose Wednesday after J.P. Morgan analyst Doug Anmuth raised his rating on the social media company to overweight from neutral, based on strength in the digital ad market.

The analyst sent his price target to $65, a Wall Street high, according to Bloomberg, from $52. J.P. Morgan pegged Twitter as a top 2021 pick, after Alphabet  (GOOGL) - Get Report and Facebook  (FB) - Get Report.

Twitter shares traded Wednesday at $54.65, up 3.41%. The shares have risen 22% in the last month.

Digital advertising growth should accelerate next year, Anmuth wrote in a commentary. Twitter stock should benefit the most, he said. It “will show the biggest rebound given its sharper pandemic-driven ad decline.”

J.P. Morgan's Anmuth likes Twitter better than Snap  (SNAP) - Get Report or Pinterest  (PINS) - Get Report. While those two companies have stronger growth than Twitter, it trades at “a substantial discount” to them, Anmuth noted.

“Revenue prioritization throughout the company [and] early benefits from re-built ad tech” also will boost Twitter, the analyst said. So will “ongoing activist pressure” and share buybacks.

Twitter is under-owned by investors, Anmuth opined.

Meanwhile, J.P. Morgan lifted its price targets on Alphabet to $2,050 from $1,870, with an overweight rating; on Snap to $60 from $42, with an overweight rating; on Pinterest to $82 from $75, with an overweight rating; and on Spotify  (SPOT) - Get Report to $350 from $300, with an overweight rating.

Alphabet recently traded Wednesday at $1,769.08, up 0.45%; Snap at $52.01, up 1.29%; Pinterest at $70.91, up 0.31%; and Spotify at $321.67, down 1.71%. 

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