Wells Fargo starts Twitter at Market Perform, says "transformative opportunity" is already priced in

|By:, SA News Editor

Wells Fargo initiates coverage on Twitter (TWTR) with a Market Perform rating and valuation range of $36-39, saying the opportunity of the transformative platform is priced in.

"While we view Twitter as a transformative social platform with abundant opportunity to expand its audience scale, consumer value proposition, and advertising utility, we believe current valuation reflects our near- to medium-term optimism," analyst Peter Stabler said.

"We established FY2013E and FY2014E revenue of $645M and $1,107M and adjusted Ebitda of $64M and $148M, with non-GAAP EPS of -$0.20 and -$0.01, respectively. Though our valuation range embeds a significant premium to mean multiples of our Internet coverage, we believe a premium is warranted due to rapid growth, differentiated mass media partnerships, mobile content consumption trends, and an industry shift toward deep data targeting and programmatic execution."

TWTR closed at $41.00 Friday, with a 52 week range of $39.40-$50.09.

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