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JPMorgan Upgrades Its Outlook for Twitter, TWTR Stock Hits Six-Year High

UTC by Bhushan Akolkar · 2 min read
JPMorgan Upgrades Its Outlook for Twitter, TWTR Stock Hits Six-Year High
Photo: Depositphotos

On Wednesday, TWTR stock price surged past $55 levels for the first time since October 2014. JPMorgan expects Twitter’s advertising revenue to surge by 20% in 2021 and thus has updated the stock price.

On Wednesday, December 16, investment giant JPMorgan Chase & Co (NYSE: JPM) upgraded its outlook for social media giant Twitter Inc (NYSE: TWTR). Following it, TWTR stock price hit its multi-year high of $56 while closing Wednesday’s trading session at $54.

JPMorgan has upgraded Twitter to an overweight rating and is very-much bullish for the advertising revenue of the company in 2021. As per JPMorgan, Twitter revenue is likely to surge by 20% backed with strong online advertising demand. As a result, JPMorgan has also upgraded the target price of TWTR stock to $65 from the previous $52.

JPMorgan analyst Doug Anmuth writes that the entire digital ad industry is likely to see growth in 2021. However, Twitter will show the biggest rebound given its sharper pandemic-driven ad decline. The analyst further expects that Twitter can also benefit from “revenue prioritization throughout the company, early benefits from re-built ad tech”.

On Wednesday, Twitter made a six-year-high hitting $55+ levels for the first time since October 2014. TWTR stock has already surged 35% from the low levels of November 2020. On a year-to-date basis, TWTR stock has gained more than 70%. However, in comparison to its peers, Twitter is still an underperformer. Both Snap Inc (NYSE: SNAP) and Pinterest Inc (NYSE: PINS) have gained 150% and 200% respectively.

Explaining it, JPMorgan said that Twitter is under-owned by the investors. Thus, the company has preferred its risk profile over that of Snapchat and Pinterest.

TWTR Stock Technical Charts

The technical chart for TWTR stock shows that it has broken out from its previous highs during Wednesday’s trading session. The RSI indicator has also moved into the overbought territory with a reading of 78.90. However, the moving average convergence divergence (MACD) suggests a strong bullish uptrend. Before that, TWTR stock is likely to consolidate in the near-term.

Photo: TradingView

In another positive development, Snapchat announced native Twitter integration allowing its users to bring their tweets into Snapchat as part of an interactive embed. This will allow seamless sharing of tweets between the two platforms. The news also provided additional fuel to the TWTR stock.

On the other hand, Facebook Inc (NASDAQ: FB) the biggest advertising platform is facing issues with Apple Inc (NASDAQ: AAPL). The latest iOS 14 upgrade threatens Facebook’s ad targeting potential on iOS handsets as it introduces more privacy. This could potentially boost ad spent on other platforms like Twitter.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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