Twitter, Inc. (TWTR) PT Raised to $32 at Deutsche Bank

Deutsche Bank raised its price target on Twitter, Inc. (NYSE: TWTR) to $32.00 (from $22.00) while maintaining a Hold rating.

Analsyt Lloyd Walmsley commented, "We feel increasingly positive on Twitter reflecting strong product and business momentum across user engagement, monetization and continued cost discipline resulting in strong profit growth. We continue to see a large opportunity for Twitter to better convert top-of-funnel users to DAUs, continue to improve ad relevance and increase budget share, and to show margin upside given disciplined cost growth. 1Q results were strong, and beat DB/Street estimates across almost most metrics. Video represented a majority of the revenue for the second quarter in a row; management called out growth in Japan and UK, and attributed the strength to higher relevance, new formats (such as video website cards and video app cards), larger audience, and better sales execution. Twitter's guide for 2Q18 implies top line growth of 15% - 21%, in line with 1Q18; for the remainder of the year, the company expects q/q trends to more closely resemble 2016 rather than 2017, which incorporates positive impact from the upcoming Soccer World Cup, some uncertainty around GDPR as well as tougher comps starting in late 3Q. We think the outlook could be conservative given continued momentum in user growth (number of MAUs) and engagement (DAU/MAU ratio), strong broad-based advertiser support for video ad products, recent cadence on product launches, and the heightened focus on improving sales execution. Nevertheless, despite the more positive view of the fundamental outlook, we remain on the sidelines given Twitter's premium valuation on relatively slower growth. As such, while we increase TP to $32 (from $22) to reflect our updated estimates, we maintain Hold rating given limtied upside to our target price."

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