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Twitter Gets a Price Target Bump From JPMorgan

Twitter (NYSE:TWTR) shares exploded in Tuesday trading, hitting its highest level in more than three years.

The big move came after JPMorgan raised its price target on the San Francisco-based social media stock. Analyst Doug Anmuth of the firm raised his target to $50, representing a roughly 20% premium from Monday’s closing price.

Admuth wrote in a note, “We are raising our estimates on Twitter shares as we believe advertising momentum is strengthening, particularly among large marketers. Industry conversations suggest the value for advertisers on TWTR is increasing, driven by double-digit daily-active-user growth (6 straight quarters), improving product for both users & marketers (especially video), higher click-thru rates & ad engagement, & better pricing as cost per engagement (CPE) continues to decline (we estimate -29% in 2018).”

According to the firm, Twitter (NYSE:TWTR) can grow ad revenue over 20% in the next few years with the help of video and live events.

The World Cup in Russia especially could be a key source of advertising revenue says JPMorgan.

Anmuth wrote, “The World Cup is one of the world’s most watched events, and we believe Twitter will serve as a powerful platform for fans to learn ‘What’s Happening Now’ and to engage in conversation around matches.”

He also wrote, “Live events and sports drive more engagement on Twitter as evidenced by the 672 million tweets sent during the 2014 Fifa World Cup, 45 million tweets sent during Super Bowl 2018 (4.8 billion impressions), and 33 million tweets sent during the 2017-18 College Football season (4.9 billion impressions).”

It was also on Tuesday that Nuveen Managing Director, Stephanie Link, said on “Halftime Report, “The investments are starting to pay off. They made all this push, especially into video, so they have high expense rate levels and now they’re starting to see the results. You’re starting to see maybe some operating leverage in the model.”

A day after the price target hike from JPMorgan, Twitter (NYSE:TWTR) also announced that it is changing its service to offer more space to major events such as the 2018 FIFA World Cup. Other events include elections, and natural disasters.

The social media company said it would start notifying its users in its app when a particular event is going on that may be of interest to them.

Twitter’s vice president of product, Keith Coleman said, “We want Twitter to be the little bird on your shoulder that tells you what you need to know when you need to know it.”

Shares of Twitter (NYSE:TWTR) have gained over 80% so far this year.

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