Twitter Inc (NYSE:TWTR) Reverses Losses Thanks To Goldman Sachs Upgrade


Dallas, Texas 01/14/2014 (FINANCIALSTRENDS) – Twitter Inc (NYSE:TWTR)’s shares jumped up higher with a bang, when trading commenced yesterday on the back of the news that investment banking firm Goldman Sachs has upgraded the stock. By the time trading was suspended for the day yesterday, the share price had settled at $57.82 per share after shedding some of the gains it had registered through the day. It ended the day, 1.44% higher than January 10 close.

Goldman Sachs Thumbs Up

On January 13, Goldman Sachs’s lead analyst Heath Terry sent out an investor note in which he reiterated the previous “Buy” rating on the stock and has upped the price of the stock form his previous recommendation of $46 to $65. He has opined that in spite of scepticism being voiced by other trade watchers he is convinced that the micro blogging site is stepping on the gas on its product innovation strategy and has sighted the close to four times increase that Twitter Inc (NYSE:TWTR), has registered in providing new enhancements to its messaging platform in the past 90 days.

Positive Outlook for FY14

Analyst Terry goes on predict that the new innovations are expected to positively impact Twitter Inc (NYSE:TWTR)’s operations at three broad levels of “usage, engagement and monetization” which in tandem, are expected to position the company for, sustained growth in the long term. In the report, Goldman Sachs has raised the revenue estimate per month in 2014 to go up to $311 million. This revenue increase is being predicted on the basis of its active monthly user base, tracked over a monthly basis going up to 292 million. This forecast, extrapolates Twitter Inc (NYSE:TWTR)’s annual revenue in FY14 to range around 41.23 billion.

Terry has included in his note, “We believe timeline updates, trending TV shows and popular photos simplify the product, improve ease of use, and drive adoption of new functionality that in aggregate likely drive user and engagement growth.”