Market Overview

This Twitter Analyst Saw In December What Few Others Did

Share:
This Twitter Analyst Saw In December What Few Others Did
Related TWTR
Communication Services Sector Gets An Equal-Weight ETF
IMX Dips In October, But Investors Remain Bullish
Dorsey: Twitter's edit button under development (Seeking Alpha)

Twitter Inc (NYSE: TWTR) reported a surprise earnings beat Thursday, catching some investors off guard. But at least one notable Wall Street wasn't surprised and was recommending investors buy the stock in 2017.

The Analyst

Aegis Capital's Victor Anthony.

The Thesis

The case for buying Twitter's shares was apparent to Anthony in December of last year when he upgraded the stock's rating to buy, he said during CNBC's "Squawk Box" segment. The analyst's channel checks at the time found that advertising dollars are "flowing back to Twitter."

Anthony's checks also suggested that Twitter's owned-and-operated ad growth would turn positive in mid-2018, but it did so earlier than expected in Q4 by a high-single-digit.

"We are ahead of expectations," Anthony said. "That's a material positive and that's why the stock is up 20 percent."

Twitter also benefited in the quarter from multiple advertisers being "forced out" of Facebook Inc (NASDAQ: FB)'s platform due to high prices, Anthony said. But Twitter's strong report was more due to operational efficiencies, he said. 

Twitter's earnings report could be considered a "huge inflection point" moving forward, Anthony said. While investors wouldn't be faulted for wanting Twitter's stock to return to its all-time highs near $75 per share, a more reasonable near-term objective would be the stock's inclusion in the S&P 500 index — but only if the company can "keep up this pace of profitability over the next several quarters."

Price Action

Shares of Twitter gained 30 percent after Thursday's market open and hit a new multi-year high of $35. Shares were trading up 18.47 percent at $31.88 at the time of publication. 

Related Links:

ICYMI: Snap Earnings, VIX Instruments, AMD And Nvidia

Benzinga Pro's 6 Stocks To Watch Today

Latest Ratings for TWTR

DateFirmActionFromTo
Oct 2018Aegis CapitalMaintainsBuyBuy
Oct 2018BMO CapitalMaintainsMarket PerformMarket Perform
Oct 2018NomuraMaintainsNeutralNeutral

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: Aegis Capital CNBC social media Squawk Box Twitter AdvertisingAnalyst Color Analyst Ratings Media Best of Benzinga

 

Related Articles (FB + TWTR)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
JBLGoldman SachsUpgrades0.0
IMOBarclaysUpgrades0.0
JRVRKeefe Bruyette & WoodsDowngrades40.0
ADMPB. Riley FBRDowngrades2.5
EAFVertical GroupDowngrades9.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

When "Insider" Greed Is Good

BP Maintains Dividend Payments: Is A Hike Around The Corner?