Brean On Twitter: 'It's Time To Define'

In a report published Friday, Brean Capital analyst Sarah Hindlian maintained a Buy rating and price target of $55 on

. The company announced that its CEO for the past five years, Dick Costolo, was stepping down from his position on July 1. Jack Dorsey, co-founder and chairman of the company's board, is to serve as the interim CEO until a replacement is found. "We have been anticipating just such an announcement following high levels of public scrutiny around Twitter's volatile and frequently disappointing financial results, and following last week's shareholder meeting," Hindlian said. A change in CEO is expected to help the company better define itself as an "event-driven platform," and attract bigger brand advertisers, while responding more quickly to marketplace dynamics. Twitter has also reiterated its 2Q15 guidance, which the analyst believes would help quell market concerns regarding a worsening of the environment in Q2, given the earnings report for the last quarter, which led to Mr. Costolo stepping down. "Mr. Costolo, rightly or wrongly, has taken much of the blame for Twitter's slow response to building a more robust advertising platform, having an easier user onboarding process, and posting unstable financial results. We believe the scrutiny has continued to increase and drove a dual-decision by the board and Mr. Costolo that it was time to part ways, the Brean Capital report stated.