Pivotal Research Upgrades Twitter, Recent Weakness 'Overdone'

Brian Wieser of Pivotal Research Group upgraded shares of Twitter Inc TWTR on Wednesday to Buy from Hold with a $42 price target.

“Where we have been negative much of the time since Twitter's IPO is with the valuation that investors have ascribed to it given its venture-like characteristics and our view that the core product has only niche market potential at maturity,” Wieser wrote. The analyst adds that recent weakness seen in shares “has been overdone” although this does not translate to investor concerns dissipating.

Wieser does however note that a main investor concern, management turnover, isn't necessary a bad thing and may imply that the company “is still trying to become something bigger than it presently is” which implies strict internal expectations.

The analyst also adds that revenue growth may “allay concerns” surrounding user trends, as the company's relationship with advertisers remain strong. As such, Wieser is believes the company will see $6.6 billion in revenue by year end 2015.