Twitter (TWTR) Risk Skewed to the Downside Amid Rumor-Fueled Surge - SunTrust's Peck
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
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%."
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
- Twitter (TWTR) Gains on Reports Disney (DIS) Has Rekindled Buyout Interest
- Twitter (TWTR): Significant Layoff Possibly Coming With Earnings Call - Suntrust
- Jefferies Cuts Price Target on Waters Corp. (WAT) Following Revenue Miss
Create E-mail Alert Related CategoriesAnalyst Comments, Rumors
Related EntitiesSunTrust Robinson Humphrey, Twitter, IPO, Robert Peck
Sign 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!