Twitter up 4% after Nomura upgrade

"We believe that the market has now priced in the expectation that Twitter (TWTR) remains a niche social media product," says Anthony DiClemente, upgrading the stock to a Buy with $43 price target. "Risk/reward is much more favorable now, given the possibility that product enhancements rejuvenate user growth."

DiClemente's five reasons for the upgrade: 1) Markets have priced in the assumption that Twitter is just a niche product; 2) Velocity of monetization per user growth is fastest in the sector by far; 3) International is just scratching the surface; 4) Incremental margins will be higher than the Street is modeling; 5) He's raising his estimates above those of the Street given the above.

DiClemente's target price of $43 implies a 24x P/E ratio after discounting back from his 2017 EPS estimate of $2.19.

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Comments (8)
  • benitus
    , contributor
    Comments (3473) | Send Message
    It should reach $40 at least, if the K8 filers don't bring it down. I was short on its way down but now, I'm long, so I expect some serious profits on its way up. However, it should bop up and down before getting anywhere, which is good for day-traders like me. Let's see what the near term holds for us indeed.
    28 May 2014, 08:21 AM Reply Like
  • Island_Dweller
    , contributor
    Comments (677) | Send Message
    One of the few times I'm on the side of an analyst. Many of his points I've drawn from my own research. Truth be told I expected to be in the upper 20s before the push back to 40, but we may well be past that scenario.


    Let's see how well TWTR holds the premarket gains.
    28 May 2014, 08:44 AM Reply Like
  • 22643611
    , contributor
    Comments (2099) | Send Message
    I see TWTR in oversold territory along with the short interest and upgrade it should get a pop from at least a bit of a short squeeze.
    I think it will be temporary and then continue to drift sideways and slowly down.
    As far as its fallen you would think that many analysts would jump on the bandwagon of upgrading TWTR but this is only the fourth (since earnings) if I'm not mistaken which leads me to believe the big money has already exited and its more the retail traders who are doing the buying and selling.
    28 May 2014, 08:49 AM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
    Ahh yes, the old forward, forward, forward, forward PE multiple of 24x. Pretty standard stuff really. I'll be buying more puts later today.
    28 May 2014, 09:41 AM Reply Like
  • Justin Hohn
    , contributor
    Comments (730) | Send Message
    2.19! In 2017!


    What a bargain at only 24x "crystal-ball-twice-re... aunt's-side" earnings.
    28 May 2014, 12:10 PM Reply Like
  • Kevin Hess
    , contributor
    Comments (408) | Send Message
    Assuming it gets there in the first place. I'm baffled by these sky high valuations.
    28 May 2014, 05:41 PM Reply Like
  • Contrarian2525
    , contributor
    Comments (55) | Send Message
    Do not forget about its Chinese sibling $WB, or better still, $0700.HK. The latter owns WeChat that gains ground on Weibo and is less susceptible for government scrutiny. I am getting out of TWTR in favor of WB.
    29 May 2014, 02:01 PM Reply Like
  • combatcorpsmanVN
    , contributor
    Comments (1362) | Send Message
    $TWTR - this IPO comes to market at $45/share and runs up to 75/sh (plus or minus) and then crashes to $30/sh. Meanwhile, the syndicate/underwriters have once again stuck it up the *** of the uninitiated small investor who believes these bandits on WS. It never ceases to amaze me that people/investors watch the clowns on CNBC/Fox Business/Bloomberg "honk' IPO's to the point that the small investor thinks: "I better get in as fast as I can or I'll miss this golden opportunity to make a huge windfall… Truly sad b/c the underwriters cater to the founders which is a wonderful source of future business while sticking-it-to the public. One would think after tech wreck of 2000 and the total collapse in 2008 -- people would wise up to the game played by Wall Street. But, I guess the same ponzi scheme vis a vis IPO pricing is still working to perfection on WS, so why change what works.


    Now that TWTR is $31/sh -- it's probably a good time to buy, especially if the WS television clowns are saying TWTR is a loser. I think I'll go long now that TWTR is no longer the flavor of the month on business television shows.
    2 Jun 2014, 05:07 PM Reply Like
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