Twitter Will Reverse Last Year's MAU Decline, Says Deutsche Bank
Twitter Inc (NYSE: TWTR) remains on track in 1Q with stable MAUs and improving engagement. Deutsche Bank’s Ross Sandler on Monday maintained a Buy rating for the company, with a price target of $25. The analyst expects Twitter to report 1Q revenues in-line with estimates.
Twitter is unlikely to beat Q1 revenue expectations, since checks are mixed, analyst Ross Sandler said. He also expects guidance to be broadly in-line with the Q2 estimate of $650 million.
Big Positive In 1Q
Twitter’s MAUs are likely to have been stable in Q1, reversing the decline witnessed in the previous quarter. Sandler added that there were signs of “improving engagement from the algorithmic timeline, favorites button and other product tweaks.”
The analyst believes O&O ad revenue could reaccelerate in the back half of the year, “when all the DR plumbing is in place.” Hence, shares are likely to remain range-bound in the near term, although there is upside in 2H16.
Twitter is estimated to have added +2 million net MAU in Q1. (back to 307 million). Referring to the prospects for 2016 and beyond, Sandler commented that there could be “further emphasis around video, real-time and the algorithmic timeline, and deeper integration with Periscope.” He added that these efforts are likely to boost engagement, although are unlikely to result in “massive MAU growth.”
Latest Ratings for TWTR
|Oct 2016||Loop Capital||Upgrades||Sell||Hold|
|Oct 2016||Evercore ISI Group||Upgrades||Sell||Hold|
|Sep 2016||Loop Capital||Downgrades||Hold||Sell|
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