UPDATE: Wunderlich Securities Initiates Coverage on Twitter on Great Company, Overvalued Stock
In a report published Monday, Wunderlich Securities analyst Blake T. Harper initiated coverage on Twitter (NYSE: TWTR) with a Sell rating and $34.00 price target.
In the report, Wunderlich Securities noted, “We are initiating coverage of Twitter, Inc. (TWTR) with a Sell rating and $34 price target. We expect Twitter to be an effective targeting platform for advertisers given the data in its users' Interest Graphs, its relevance in TV programming, and the relatively seamless mobile format of its promoted posts. We forecast the company to grow revenues at a 49%+ CAGR over the next three years by attracting ~4% of the total expected advertising spend on mobile, from ~1.5% now. However, we believe a current fair value for the stock is $34 based on our DCF, or 14x and 10x EV/S on FY15 and FY16 estimates, respectively, which is still a premium to peers. We acknowledge that stronger demand for the limited supply of shares could push the stock higher in the near term.”
Twitter closed on Friday at $43.98.
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