Twitter Rises as Pivotal Upgrades to Buy on Ad Potential

Pivotal Research analyst Michael Levine raised his rating on the Twitter to buy from hold and his share-price target to $59.75 from $36.
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Twitter  (TWTR) - Get Report shares rose on Wednesday after Pivotal Research Group analyst Michael Levine raised his rating on the social-media-messaging icon to buy from hold and his share-price target to $59.75 from $36.

"Investors will admittedly need to underwrite a high multiple with a company that has had some historical executional hiccups," he wrote in a commentary cited by MarketWatch. "We believe it will be warranted if the ship is moving in the right direction as we suspect."

Twitter shares recently traded at $45.49, up 6.47%. They have climbed 10% this year.

Levine expressed optimism about Twitter’s direct-response-ad business. 

"While we still have some question marks about the business, we see signs of life," he said. "Additionally, we think sentiment is by far the most negative in our coverage and as a result, the rubber band for stock outperformance the greatest."

Morningstar analyst Ali Mogharabi offered a mixed assessment of the company. 

“While the current pandemic, the economic downturn, and the lockdowns and quarantines have helped platforms such as Twitter grow their user base, lower ad spending has weakened user monetization, which we think will continue throughout the remainder of 2020,” he wrote after Twitter’s last earnings report in July.

“We continue to expect Twitter to lag its peers such as Facebook  (FB) - Get Report in attracting direct response ad dollars, which are in higher demand,” Mogharabi said. 

“However, due to strong user growth we have raised our projections slightly, resulting in a $33 fair value estimate (from the previous $32). We continue to view the no-moat stock as fairly valued.”