Twitter Hits Four-and-a-Half-Year High on Deutsche Bank Upgrade

Twitter Hits Four-and-a-Half-Year High on Deutsche Bank Upgrade
October 14, 2020


Investors showed increased interest in the stock of Twitter Inc (NYSE: TWTR) this week after Lloyd Walmsley, an analyst at Deutsche Bank upgraded the social media platform provider to “buy” from “hold,” citing an increase in growth rate during the second half of 2020. The stock closed at $47.00, down $1.25 or 2.59% from the prior close. During intra-day trading, the stock hit a 4 1/2 year high of $48.13. So far this year, the stock has gained about 40%.

According to Walmsley, Twitter is in a strong position to gain from any huge event next year, following its advertisement server revamp, improvised product related to mobile app promotion, and a likely high-profit subscription product.

The analyst revealed that he didn’t have a bullish view of Twitter’s stock earlier due to the weak advertising channel, but that this is no longer the case. Furthermore, Walmsley stated that the stock is now a “compelling bull case” for 2021.

In a note to clients, Walmsley stated that he is beginning to receive positive feedback about the San Francisco, California-based company’s advertisement channel and suggested investors take advantage of attractive valuation.

The analyst said, “We are now starting to hear more positive feedback in the ad channel and would take advantage of the opportunity to build a position now before a stronger ad recovery takes hold and we get into the period of 2021 excitement.” 

To avoid disruption or manipulation in the US election or any other civic event, Twitter is taking additional measures, including revamping the product to pave the way for the glitch-free organization of the democratic procedures. In this regard, the company had recently amended its civic integrity guidelines. To minimize the spread of false info, the company has introduced additional labels and limitations.

Walmsley raised his rating to buy from hold and boosted his stock price target to $56 from $36.

Based on the guidelines described above, Twitter stated that it would “label Tweets that falsely claim a win for any candidate and will remove Tweets that encourage violence or call for people to interfere with election results or the smooth operation of polling places.”

Twitter further stated that it might label Tweets that infringe its guidelines on civic morals and COVID-19. Any attempt to provide bogus and rigged data will be labeled as well. With this action, Twitter believes that users will search for accurate info before attempting to re-tweet. Even misleading data from US politicians and those with over 100k followers will be labeled.

A week before, Twitter stated that it is actively working on a unique facility called “Birdwatch,” which could caution users about deceptive tweets. The initiative began against the backdrop of confusion caused by the circulation of tweets related to US President Donald Trump’s health after he confirmed his COVID-19 infection. The Birdwatch feature is anticipated to be provided as a button in a drop-down menu of each tweet, enabling users to include a note on a misleading tweet.

The rating upgrade and initiatives taken by Twitter to clean up the platform are expected to keep the stock range-bound with a bullish bias.

The price chart provided below indicates that the stock has broken above the resistance at 44. The MACD indicator is making new highs. Therefore, we are anticipating the stock to rally in the days ahead.

twtr - technical analysis - 14th October 2020

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Richard W

Richard W

Richard is the guy who know everything there is about the financial industry, working in a top firm for over 15 years, he will give the lowdown on some of the biggest companies in the world

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