J.P. Morgan Initiated Coverage on Twitter Based on Fair-Value Assesment
J.P. Morgan analyst Doug Anmuth initiated coverage on Twitter, Inc. (NYSE: TWTR) with a Neutral rating and $40 price target.
Anmuth noted Twitter's unique position and early stage of monetization with growth drivers ahead. The analyst commented that with shares at $41.57 and a $30 billion market cap on Friday's close, the stock is fairly valued. Anmuth expects that the recent IPO will boost user and engagement levels in the near-term.
J.P. Morgan wrote, "Twitter continues to innovate and improve its product offering through richer content and media in the timeline. During 4Q13, Twitter launched updates to both its desktop and mobile timeline interface to display previews of pictures and videos, which we believe should help increase user engagement. Similarly, on the ad product side, we expect Twitter to continue to make its ad platform more engaging and easier to use, with examples including Twitter Cards, Twitter Amplify, and self-serve products. We believe Twitter also shows a relatively low number of ads in the timeline, suggesting room for ad load upside."
Anmuth expects monthly active users to surpass 500 million in 2018. The analyst projects 2012-2015 CAGRs of 74% for revenue and 131% for EBITDA.
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