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Deutsche Bank: Twitter Shares Can Move 'Meaningfully Higher' Following Google Deal

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Ross Sandler of Deutsche Bank on Thursday commented in a note that Twitter Inc's (NYSE: TWTR) new deal with Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) to make tweets appear on search results could push shares "meaningfully higher."

See Also: Twitter And Google, Together Again

According to Sandler, the agreement could negate the bearish thesis that Twitter can't move beyond its current 284 million-niche user base. The analyst adds that consumer Internet stories like this one 1) could be considered highly controversial and out of favor, 2) have improving core products and technology and 3) are massively under-monetized usually result in higher valuations over time.

"Hopefully this potential partnership starts to move the conversation away from the quarterly ‘what's the monthly active user whisper' and towards all the good fundamental trends going on at Twitter," Sandler wrote.

However, the analyst did caution that "where there is smoke, there's usually fire" given the fact that at this stage, the agreement is merely press speculation reported by Bloomberg and others. Also, it is difficult to quantify the traffic and revenue impact.

Shares are Buy rated with a $60 price target.

Latest Ratings for TWTR

DateFirmActionFromTo
Mar 2017BarclaysInitiates Coverage OnUnderweight
Feb 2017CitigroupDowngradesNeutralSell
Feb 2017Loop CapitalDowngradesHoldSell

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Posted-In: Bloomberg Deutsche Bank Google Search Ross Sandler twitterAnalyst Color Analyst Ratings

 

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