JPMorgan Raises Target For Twitter Ahead Of World Cup
Shares of Twitter (TWTR) are on the rise after JPMorgan analyst Doug Anmuth increased his price target on the stock to $50 ahead of the World Cup as he believes the microblogging platform will serve as a powerful tool for fans to learn what is happening in real time and engage in conversation around matches. Further, the analyst argued that advertising momentum is strengthening, particularly among large marketers.
STRONG AD MOMENTUM: In a research note to investors this morning, JPMorgan's Anmuth raised his price target for Twitter to $50 from $39, saying the company's advertising momentum is strengthening, particularly among large marketers. Industry conversations suggest the value for advertisers on Twitter is increasing, driven by double-digit daily active user growth for six straight quarters, improving product for both users and marketers, and better pricing amid declining cost per engagement, Anmuth told investors. The analyst projects Twitter's advertising revenue growth will accelerate in both the second and third quarters and believes his 21% growth projection for the fourth quarter likely remains conservative. Anmuth increased his second half of 2018 and 2019 estimates by around 3% across both revenue and EBITDA, while pointing out that he has "increasing confidence" that the company can grow advertising revenue 20%-plus over the next few years. Additionally, the analyst argued that Twitter will benefit from the upcoming World Cup, one of the world's most-watched events. Twitter will serve as a powerful platform for fans to learn "What's happening now" and to engage in conversation around matches, he added. Anmuth also noted that Twitter's partnership with FOX Sports (FOXA) will provide near real-time highlights of every goal scored and video is a major area of strength for Twitter, already driving more than half of the company's total advertising revenue. The analyst reiterated an Overweight rating on Twitter's shares.
PRICE ACTION: In morning trading, shares of Twitter have gained almost 6% to $43.82.
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