Deutsche Bank Defends Twitter, Says Negativity Is 'Bit Extreme'

Deutsche Bank recently released a note on Twitter Inc.

after the company announced that they lost customers in the fourth quarter. Currently, Deutsche Bank rates Twitter as a Buy with a $25 price target. Ross Sandler and Lloyd Walmsley, analysts at Deutsche Bank, wrote, "The negative narrative around Twitter feels a bit extreme of late...Despite many changes to management ranks recently, the tone of the call was upbeat around both revenue and new product initiatives for FY16.... We have reduced our target multiples to reflect the slower revenue growth and multiple compression in the peer group. Deutsche Bank analysts gave two key takeaways that have the potential to drive Twitter's stock higher: 1. Increasing advertising load Analysts noted that Twitter's advertising load increased meaningfully in the fourth quarter, driven by higher demand in international markets. This increase in advertising has the potential to drive top line growth for Twitter as it seeks to expand its social networking platform and increase its user base. 2. Financials In their last earnings announcement, Twitter gave revenue and earnings results that exceeded Deutsche Bank's estimates by 2 percent and 18 percent respectively. Going forward, Twitter hopes to channel this positive momentum and increase profitability by driving operational efficiency and developing advertising initiatives that target its primary user base. Currently, Twitter is trading at $14.34, down 4.27 percent.