Jefferies Has 8 Big Reasons to Buy Twitter Now
While many older Americans are using Facebook, much of younger America is getting news, information, commentary and more from Twitter.
While Facebook is the undisputed social media leader for now, many analysts that cover the sector have started to notice a change. While many older Americans are using Facebook, much of younger America is getting news, information, commentary and more from Twitter. The millennial demographic from 18 to 29 is one of the most sought after by advertisers, and Twitter is a place they may target big time. We highlighted the staggering number of teens online constantly.
In a new research note, the analysts at Jefferies not only start coverage on shares of Twitter Inc. (NYSE: TWTR) with a Buy rating and a $65 price target, they list eight big reasons why the tech stock in an outstanding buy even at current levels. They cite online video and mobile use tailwinds as two of the compelling factors for the initiation. Twitter closed trading on Thursday at $52.17.
Here are the eight reasons Jefferies has for buying Twitter now:
- Online video ads are estimated to be a $17 billion opportunity by 2017. Twitter’s launch of Periscope helps it stand apart in this space.
- The growth in the online advertising market is increasingly levered to mobile. Some 88% of Twitters ads are mobile.
- Social commerce is growing an incredible three times faster than e-commerce.
- Twitter is increasing the advertising load. In the third quarter 2014 it was 1.3%, and management is targeting 5%.
- Twitter is a great match with TV as 66% of mobile users tweet while watching TV, often sports. Some 70% of the tweets are about what is live on TV.
- The Twitter user experience is improving fast. In fact, user trends started to turn around for the company in January.
- The company’s operating leverage is improving as it continues to roll out new advertising products.
- International is starting to monetize in a more positive way. The report cites the fact that while international accounts for 77% of the user base, it only produces 34% of the total revenue. Clearly raising that would add to the top and bottom line.
Even though Twitter had a highly anticipated initial public offering (IPO), it struggled out of the gate and the bears smelling blood pounced. The turnaround over the past year has been dramatic, and the bulls may be poised to get the last laugh.
ALSO READ: Who Would, or Even Could, Acquire Twitter?
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
