UPDATE: Bank Of America Upgrades Twitter, Suggests 12.5% Upside

In a report published Friday, Bank of America analyst Justin Post upgraded Twitter (NYSE: TWTR) from Underperform to Neutral and maintained a $36.00 price objective.

Post noted the company's improving quarter-over-quarter active user growth from nine million in the fourth quarter to 14 million in the first quarter. In addition to greater MAUs, the analyst is optimistic on Twitter's monetization traction with revenue per 1,000 timeline views up 96 percent.

Additional site changes, new apps, introduction of native ads, and new designs and features should also aid revenue and drive engagement, according to Bank of America. The analyst wrote, “User growth (we see risks) and monetization vs. estimates (we see upside potential given low ad loads) will continue to drive investor perception of the opportunity.”

Shares of Twitter closed at $31.96 on Thursday. Bank of America's $36.00 price objectives suggests a 12.5 percent upside from this morning's price. The stock is currently up 0.5 percent premarket following the upgrade.