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Why JPMorgan Is Turning Bullish On Twilio Ahead Of Q4 Report

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Shanthi Rexaline
·2 min read
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Cloud communications company Twilio Inc (NYSE: TWLO) is scheduled to report its fourth-quarter results Feb. 17, with analysts, on average, forecasting more than 37% revenue growth and a loss of 8 cents per share.

The Twilio Analyst: JPMorgan analyst Mark Murphy upgraded Twilio shares from Neutral to Overweight and increased the price target from $300 to $465.

The Twilio Thesis: Digital acceleration is alive and well, and JPMorgan's view of "pandemic as forcing function" to adopt these technologies will become incrementally clearer, Murphy said in a Tuesday upgrade note.

The speed of exploration, experimentation, adoption of new channels and consideration of more complex use cases among Twilio's enterprise customers is improving, the analyst said.

Company-specific tailwinds are also propelling Twilio's business in 2021, he said.

Related Link: Why Stifel Is Bullish On Twilio: 'Clear Leadership, Category-Defining Position'

More CEOs are now looking to Twilio as a strategic partner for customer engagement, rather than just a communication layer, Murphy said.

JPMorgan leaving Twilio off its recommendation list in the second half of 2020 was a "glaring mistake," the analyst said.

Specific tailwinds that are expected to drive solid growth-at-scale for Twilio include elevated enterprise presence; eventual improvement in COVID-19-impacted sectors, including travel, rideshare and hospitality; increasing adoption of two-way messaging; Segment acquisition synergies; and early traction with newer products including Flex, Video and Frontline, according to JPMorgan.

TWLO Price Action: Twilio shares gained 1.76% in Tuesday's session, closing at $406.57.

Related Link: Twilio Reducing Its Reliance On Uber, And That's A Good Thing

Image: Twilio.

Latest Ratings for TWLO

Feb 2021

JP Morgan

Upgrades

Neutral

Overweight

Feb 2021

KeyBanc

Maintains

Overweight

Jan 2021

Stifel

Initiates Coverage On

Buy

View More Analyst Ratings for TWLO
View the Latest Analyst Ratings

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