Cantor Fitzgerald Upgrades Twitter (TWTR) to Hold Following Pullback
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Cantor Fitzgerald upgraded Twitter, Inc. (NYSE: TWTR) from Sell to Hold with a price target of $45.00 (unchanged).
Analyst Youssef Squali said, "We are upgrading TWTR to HOLD from SELL and maintaining our $45 fair-value PT. To be sure, we still favor FB, which is a 2014 top pick for us; that said, a combination of 1) a positive read into 1Q:14 results, 2) the imminent launch of several new ad formats to drive monetization, and 3) a pullback in valuation make us less negative on the name. A large lock-up expiration in early May and a full valuation keep us from getting more constructive, however."
"TWTR's valuation remains high, but better than before. Twitter trades at 19.8x EV/Revenue, 126.8x EV/EBITDA on our FY:14 estimates, and 10x and 51x our FY:15 estimates. While still a rich valuation by any measure, it's down significantly from the 30x EV/Rev and 200x EV/EBITDA back in late December/early January. Valuation aside, given its ~100% annual revenue growth, Twitter remains positioned as an ideal play on continued secular growth in mobile and social ad spending, particularly as high-value brand ad dollars transition to the Internet," he added.
Shares of Twitter, Inc. closed at $42.49 yesterday.
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