Aegis analyst Victor Anthony upgraded Twitter (TWTR) two notches to Buy, saying he sees 2018 as an inflection point in owned and operated advertising and foresees a return to double-digit growth in that area the following year. Additionally, Anthony believes Facebook's (FB) decision to de-emphasize public content makes Twitter a more valuable resource for video and news, and therefore a more appealing takeover candidate.

BUY TWITTER: Aegis' Anthony upgraded Twitter to Buy from Sell, with a $30 price target, as he expects more upside in the stock this year. The analyst told investors that he believes 2018 will be an inflection point in owned and operated advertising growth and 2019 should see that area return to double-digit growth. Additionally, Anthony argued that he expects stable, improving monthly average user growth and sustained double-digit growth in daily active users, year-over-year margin expansion, GAAP profitability and an improvement in employee morale. Along with all of that, he sees the potential for S&P 500 inclusion for Twitter shares. Furthermore, the analyst noted that Facebook's decision to emphasize user-generated content in the News Feed over public content from businesses, brands and media could make the microblogging platform a more valuable media resource for video and news content, therefore increasing its acquisition appeal. Moreover, relative to Facebook, Twitter's shares are not necessarily pricey, he contended.

WHAT'S NOTABLE: Last week, BTIG analyst Richard Greenfield raised his price target on Twitter to $30 from $25, saying the company is "in the early stages of a multi-year turnaround". The analyst noted that management has refocused on the core product and embraced a video platform for premium content creators, leading to a more engaged user base and a meaningful improvement in sentiment from ad buyers over the past 6 months. Greenfield reiterated a Buy rating on Twitter's shares.

PRICE ACTION: In morning trading, shares of Twitter have dropped 21c, or 0.8% to $25.20.