J.P Morgan Raises Twitter Estimates & Price Target

On Thursday, analysts at J.P. Morgan upgraded shares of Twitter Inc. TWTR from Neutral to Overweight and raised the price target to $64 from $54.

Doug Anmuth outlined the reasons for the upgrade:

Anmuth believes that Twitter is a primary beneficiary of the shift towards mobile advertising and is confident in the company’s ability to continue to grow its user base over time. Analysts find that Twitter currently monetizes at half the rate of Facebook Inc. and anticipate that the gap will tighten over time.

Analysts find that Twitter has significant margin expansion potential as well, stating “Twitter has seen ~1,000 bps of EBITDA margin expansion Y/Y to 17%, but considerable headroom remains toward & possibly above the company's L-T target of 35-40% based on its no-cost content & shift toward more self-serve ads.”

Lastly, Anmuth highlights that Twitter has made vast improvements in the company’s onboarding process which has been the biggest catalyst of the increases in monthly active users over the last two quarters.

Shares of Twitter recently traded at $50.37 up 0.5 percent.