UBS Says Risks Skew Positively For Twitter In 2016, Upside Room Available For Shares

by Jayson Derrick

February 11, 2016 8:02 AM | 2 min read | Make a Comment

Shares of Twitter Inc TWTR were trading lower by more than 7 percent early Thursday morning following its first quarter resultsr.
Investors and traders were concerned that Twitter's outlook reaffirms a bearish scenario for the stock.
Eric Sheridan of UBS maintained a bullish tone and reiterating a Buy rating with a price target lowered to $30 from a previous $36.

Shares of

Twitter IncTWTR

were trading lower by more than 7 percent early Thursday morning and dipped below the $14 per share mark for the first after the company reported its fourth quarter results on Wednesday. Related Link:

Twitter Shares Fall Below $14 After Q1 Guidance Shortfall, Flat MAUs Despite the stock hitting new all-time lows, Eric Sheridan of UBS remains bullish on Twitter's outlook. Sheridan noted that while Twitter failed to deliver a quarter-over-quarter growth in users, management's commentary of a bounce-back in user levels in January offered "relief that an improved user trajectory could lie ahead." Sheridan continued that Twitter's turnaround story requires investors to hold a "neutral-to-solid user narrative" and "steady improvement in the breadth of advertisers." The analyst added that Investors will remain "squarely focused" on management's ability to achieve these objectives. "We believe the risk-reward skews positively for 2016, as we see room for upside to (muted) user growth expectations on the back of core product improvements & marketing initiatives," the analyst argued. Looking forward, Sheridan pointed out that Twitter's advertisements could be boosted by the U.S. election and the Summer Olympic games. Other initiatives, including DoubleClick integration, monetizing logged-out audiences and improved direct-response ad offerings (Dynamic Ads) could "drive better than expected top-line performance" throughout 2016. Shares remain Buy rated with a price target lowered to $30 from a previous $36.

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Posted In: Analyst Color Analyst Ratings Eric Sheridan twitter Twitter Earnings Twitter user growth UBS

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