It’s a bird, it’s a plane…it’s Twitter!
Shares of the social media giant soared nearly 11 percent Wednesday after Nomura upgraded the company to “buy” from “neutral,” and upped its price target to $43 dollars per share.
In a note, Anthony DiClemente of Nomura listed his five reasons for the upgrade:
- “The market has priced in the notion that Twitter is a niche product only”
- “Velocity of monetization per user growth is fastest in sector by far”
- “International use is just scratching the surface”
- “Incremental margins will be higher than Street is modeling”
- “Raising revenue estimates above the Street”
Shares of Twitter are still down more than 46 percent this year, but could Wednesday’s upgrade be a sign that the sentiment is changing? And is now a safe time to buy?
“While I’m not in for the long run, I think there is a trading opportunity here,” said JC O’Hara of FBN Securities, who has a price target of $38 dollars per share.
Meanwhile, Erin Gibbs of S&P Capital IQ said the recent price action in Twitter is normal for a newly IPO’ed company. “There’s a lot of volatility in those first 18 months, and most IPOs underperform.”
However, she is concerned about one thing: “I think the big concern out there is user growth. That’s why we don’t own it, and we don’t look to add it right now.”