Online Video Ads to Surge 2014-2016, Evercore Says; PT Hiked on Twitter (TWTR), Yahoo (YHOO), AOL (AOL), Google (GOOG) and Amazon (AMZN)

January 2, 2014 7:11 AM EST
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Citing higher online video ad estimates and a bullish account of "programmatic" data trends, Evercore Partners analyst Ken Sena is increasing targets and estimates for Twitter (NYSE: TWTR) ($70 from $52), Yahoo (NASDAQ: YHOO) ($40 from $33), AOL (NYSE: AOL) ($44 from $40), Google (NASDAQ: GOOG) ($1,290 from $1,250), and Amazon (NASDAQ: AMZN) ($480 from $450).

Sena sees a clear shift underway for the video consumer. "Video content is becoming more about immediacy and on-demand, the seconds-long clip formats of Vine and Instagram have unleashed a new wave of UGC, and YouTube steamrolls on for most everything video (with notable professional exceptions)," Sena comments.

Branded media buying and creative workflows are adapting, "with digital marketer no longer targeting individuals like you; the marketer is targeting you with an ability to consolidate data for retargeting that is becoming unprecedented," Sena said.

Sena expects online video advertising to surge 2014-2016. "We expect U.S. online video advertising will increase to $8.1 billion by 2016, a 37% compound annual growth rate from the $3 billion Magna Global estimates, and in excess of Magna’s 2016 estimate of $6.1 billion, or a 24% CAGR, which accounts for about one-third of global. Our higher forecast is the result of stronger inventory and pricing expectations as we see strong benefit from these social and programmatic trends we explore."

For Twitter, assuming 5% of this video opportunity over the next three years globally, 17% of the firm's 2016 Twitter revenue estimate of $6 billion would consist of video.

"Moreover, by examining other online video providers too through the framework of 1) control of the feed, 2) programmatic ad delivery across multiple devices, and 3) access to premium content, we see Google, Twitter and Facebook as best positioned," the analyst said. "What places Twitter in such strong company is the combination of its immediacy and the support that it is receiving from the traditional TV industry."

The firm reiterated their Overweight ratings on Amazon, Facebook, Google & Twitter.

For an analyst ratings summary and ratings history on Twitter, Inc. click here. For more ratings news on Twitter, Inc. click here.

Shares of Twitter, Inc. closed at $63.65 yesterday.

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