Facebook (FB), Twitter (TWTR) Price Targets Raised at Pivotal Research

Pivotal Research maintained a Buy rating on Twitter, Inc. (NYSE: TWTR) and raised its price target to $50.00 (from $42.00). Facebook's (NASDAQ: FB) price target was raised to $105 (from $102).

"In general, price target changes to companies under our coverage are made now because of changes to costs of capital embedded in the models we use across our coverage. In our valuation framework, lower long-term costs of capital (driven at this time by falling yields on long-term treasury bonds) disproportionately impact companies whose stocks are highly dependent upon their terminal values," said analyst Brian Wieser.

"Facebook remains our favorite name in the sector," continued the analyst. "Facebook can point to a wide range of factors which will sustain growth through 2015 and beyond, as increasing share of spending from small businesses and large brands alike as well as ongoing improvement in focus on performance based marketers will all help to sustain rapid growth."

"Our price target on Twitter is rising both because of the cost of capital changes described above (disproportionately impactful on a company like Twitter which will not produce cashflow for many years into the future) but also because we think there is increasing reason for positivity around the company’s ability to onetize its platform. Our valuation on the company’s equity is now $36bn, which applies against 710mm shares on a YE2015 basis to derive our new $50 price target vs. $42 previously. Half of the increase is due to upwardly revised revenue estimates and half of the increase is due to the aforementioned changes to our cost of capital estimates," he added.

Pivotal Research also raised its price target on salesforce.com (NYSE: CRM) to $80 (from $74). Google's (Nasdaq: GOOG) price target was lowered to $610 (from $620), and Yahoo!'s (NASDAQ: YHOO) price target was raised to $54 from $47).

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 $39.65 yesterday.

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