Twitter Stock: The Turnaround Has Begun

Posted On January 17, 2018 3:58 pm

A much-awaited turnaround seems to have started at Twitter Inc (NYSE:TWTR). The stock jumped about 4% on Monday. Twitter’s rally that started back in 2018 after a bullish report from JPMorgan is helping the stock maintain its gains.  Several other Wall Street analysts also think that Twitter stock will keep popping. Recently, investment firm BTIG said that a “multi-year turnaround” on Twitter has just started. The firm’s analysts think that the recent changes made by Twitter on its social platform will result in users spending more time on its platform. BTIG increased its price target for Twitter stock to $30.

Twitter stock is also gaining value amid Facebook CEO Mark Zuckerberg’s announcement of major newsfeed changing coming in 2018. Mark Zuckerberg announced in a public post on his Facebook wall that major changes in Facebook’s newsfeed will help people see more updates and content from their friends and family instead of brands and businesses. Facebook tweaked its newsfeed algorithm in 2015, after which people started seeing more posts from their liked pages and businesses. This resulted in a massive influx of ad dollars to Facebook.

But recently, Facebook came under pressure from investors due to its addictiveness and mental health problems it causes among children and teen users. Analysts think that advertisers will pull their ad campaigns after Mark Zuckerberg’s announcement. Facebook stock tanked after Zuckerberg’s post, resulting in a loss of about $3.3 billion for the young CEO. If Facebook loses the interest of advertisers in the future, Twitter will enjoy a huge stock growth, as Twitter will be the second biggest choice of advertisers. Earlier this month, RBC Capital Markets analyst Mark Mahaney said that Twitter has started doing “less worse” and the company will make more money due to a rise in advertising revenue.

Perhaps one of the biggest growth drivers for Twitter stock was an extremely bullish report from JPMorgan in December 2017, in which the firm upgraded the stock to overweight from hold. JPMorgan’s analyst Doug Anmuth increased his price target for Twitter shares to $27. Anmuth said that Twitter was “one of our top” small- to mid-cap picks for 2018. Anumth thinks that Twitter’s user growth will increase due to video and live streaming.

Twitter is taking several crucial steps which would result in an increased growth. Several reports show that the recently increased character limit on Twitter resulted in massive boost to engagement.

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