Twitter (TWTR) Risk Skewed to the Downside Amid Rumor-Fueled Surge - SunTrust's Peck
Get Alerts TWTR Hot Sheet
Rating Summary:
10 Buy, 47 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 14 | New: 1
Join SI Premium – FREE
SunTrust Robinson Humphrey analyst Robert Peck weighed in on Twitter, Inc. (NYSE: TWTR) amid various reports the company has received takeover interest from several parties and may explore a sale. The analyst says with the recent rally he sees unequal risk/reward skewed to the downside. The firm maintained a Neutral rating and price target of $18 on TWTR.
Commenting on potential takeover price, Peck commented: "Typically when a potential deal is actively discussed in mainstream media prior to announcement (pushing the price higher), the premium paid is stated vs. a prior period closing price moving average. For Twitter, we looked at the 30, 60 and 90 day averages and used 40% as a takeout premium. That level of premium would drive prices of $27, $26, and $24 - close to the original $26 IPO price and only up 3% to 15% from today’s price. Further, $26 share price would represent ~$20B transaction value, 22x EV/EBITDA (ignoring excess SBC) and 6.1x EV/Sales on 2017 street estimates – a slight premium to LinkedIn’s takeout multiples. However, should the company clarify that it is not for sale, the shares could trade back down to the ~$18 level, from before the press announcements, or down ~22%."
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 $22.62 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- RBC Capital Downgrades Range Resources (RRC) to Sector Perform
- JPMorgan Downgrades Boyd Gaming (BYD) to Neutral
- Boston Beer Company (SAM) PT Raised to $335 at Jefferies
Create E-mail Alert Related Categories
Analyst Comments, RumorsRelated Entities
SunTrust Robinson Humphrey, Twitter, IPO, Robert PeckSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!