Twitter Inc (NYSE: TWTR) is getting plenty of love from Wall Street ahead of its earnings report next week. Just days after an upgrade from Morgan Stanley sent the stock soaring 12 percent, Twitter got another upgrade on Friday from MKM Partners.
MKM analyst Rob Sanderson says even though Twitter has made several missteps in recent years, there’s no denying the platform’s popularity.
“Despite this lengthy execution gap and hefty competition for user time and attention, the company has maintained its position as the go-to source for what’s happening in the world,” Sanderson says.
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While competition in the social media space remains cutthroat, Sanderson says Twitter seems to have differentiated itself as a source for real-time information.
Before this week’s upgrades, Twitter stock had been under pressure in recent weeks following the Facebook, Inc. ( FB) Cambridge Analytical data scandal. Investors have been concerned that online advertisers such as Facebook, Alphabet, Inc. ( GOOG, GOOGL) and Twitter could be hit hard by new privacy regulations.
Twitter generated $2.11 billion in advertising revenue and $333 million in data licensing revenue in 2017.
However, Sanderson says the public nature of Twitter’s content gives it a layer of insulation from privacy concerns.
“While TWTR has a high-margin and high-growth data business, we think the company is relatively insulated from similar scrutiny as all content is posted by users in a purely public forum for anyone to see,” he says.
On Tuesday, Morgan Stanley analyst Brian Nowak said advertisers certainly don’t seem to shy away from Twitter.
“Recent advertiser conversations continue to be incrementally positive about Twitter’s ad business,” Nowak said.
He said Twitter has improved its advertising tools and reduced its prices to increase demand. Morgan Stanley is particularly impressed by Twitter’s opportunity in high-quality online video.
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“Constructive advertiser conversations, improving user growth, and positive revisions make [Twitter stock] a more compelling risk-reward,” Nowak said.
Twitter is expected to report its first-quarter earnings on April 25. Twitter reported its first ever quarterly profit in the final quarter of 2017.
Morgan Stanley has an “equal weight” rating and $29 price target for TWTR stock. MKM Partners has upgraded Twitter from “neutral” to “buy” and set a $40 price target.
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Twitter Inc (TWTR) Lands Another Upgrade Ahead of Earnings originally appeared on usnews.com
