UBS Downgrades Twitter, Inc. (TWTR) to Sell

UBS downgraded Twitter, Inc. (NYSE: TWTR) from Neutral to Sell with a price target of $12.00 (from $18.00).

Analyst Eric Sheridan comments "In the past, we have made the argument that Twitter would need "two wings" to succeed (user growth/engagement & robust ad $s). In light of its Q4 earnings report (& mgmt's initial take on '17), we see Twitter as struggling to increase a mix of user time & mainstream adoption (despite being at the forefront of many real-time global events) & needing to re-position its ad business around a smaller cohort of ad products (driven by video) in the face of hyper-competition for branded ad $s targeted at digital video by GOOG, FB/Instagram, etc. Our downgrade to Neutral (a month ago) was predicated on an even balance between a worrying operational outlook (based on our extensive ad industry checks) & potential strategic alternatives (as the press – WSJ, CNBC – have reported extensively). Going forward, we now see '17 as a year of revs growth struggles, some benefits from cost cutting (unlikely to get much investor weighting) & a valuation that remains demanding (even if non-GAAP metrics are employed)."

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 $16.41 yesterday.

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