Pivotal Researches Upgrades Twitter, Google Offers Trading Idea

On Wednesday, analysts at Pivotal Research Group upgraded shares of Google Inc. GOOGL and Twitter Inc. TWTR from Hold to Buy.

Analyst Brian Wieser finds both companies are currently undervalued by 20 percent.

Google: “Our DCF-driven valuation of $610 on a YE2015 basis, 22% above yesterday’s close, we upgrade Google to BUY.”

“Google's business has generally expanded better than we thought it would and margin erosion – while evidently worse than most investors expected – has not been quite as bad as we feared.”

Twitter: “Our DCF-driven model for the company yields a $42 price target on a YE2015 basis, 20% above yesterday’s close, which warrants an upgrade from HOLD to BUY.”

“Most critically, Twitter’s revenue growth should allay concerns around user trends, as the company’s relationships with advertisers are strong and growing. Thus we remain comfortable focusing on the scale of the business at which time revenue growth begins to plateau.”

Shares of Google, Twitter are up 1.08% and 1.48% respectively on Wednesday.