BTIG Upgrades Twitter, Inc. (TWTR) to Buy

BTIG upgraded Twitter, Inc. (NYSE: TWTR) from Neutral to Buy with a price target of $25. Analyst Richard Greenfield said daily active user growth is accelerating, and he thinks the rebound will reignite takeover speculation.

"Our upgrade of TWTR is premised on the belief that Twitter’s daily active user (DAU) growth is accelerating, particularly in the US, which has a disproportionate impact on Twitter’s revenues and profits," said Greenfield.

The analyst continued, "The evidence of growing user engagement is evident in a meaningful uptick in downloads of the Twitter application on iOS devices domestically and a CivicScience survey that shows an increase in daily usage. It is undeniable that Twitter has been thrust into the global zeitgeist following the US Presidential Election in November 2016. We do not expect immediate financial benefits; increased engagement over the past few months cannot overcome the revenue downdraft from Twitter’s user growth challenges experienced in 2015 and into 2016. In turn, we are not expecting Twitter’s Q4 2016 financials, nor commentary on Q1 2017 financials to excite investors. However, we believe second half 2017 revenues could exceed investor expectations with 2018 well above consensus."

Greenfield added, "As Twitter user growth and engagement rebounds, we believe it could reignite takeover speculation, which surged in the middle of 2016 (link). Nobody wanted to step in to pay up for Twitter, given the fear that it was heading off a cliff. But with engagement improving and the global spotlight being placed on Twitter by the media, an acquisition could be far more appealing over the next year. Not to mention, Twitter is taking meaningful steps (link) to limited 'safety' concerns around trolling and hate speech, which we believe scared away some potential buyers last year."

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 $18.26 yesterday.

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