The price targets for Twitter Inc. (TWTR)’s stock keep going up.
Stifel Nicolaus & Co. initiated coverage of the microblogging service yesterday and predicted the stock would reach $75 within a year, in what is the most optimistic target of any analyst covering Twitter. The previous high was a $70 projection from Evercore Partners Inc., with Telsey Advisory Group also initiating coverage at a $70 target yesterday.
Twitter’s stock price has undergone large swings since the San Francisco-based company went public in November at $26. The gyrations are partly attributable to a broad spread in ratings from analysts, with price targets for as low as $20 from Hudson Square Research and as high as Stifel Nicolaus’s $75. The gap between predictions is the widest among technology companies in the Russell 1000 Index with a market capitalization of more than $10 billion, according to data compiled by Bloomberg.
“Twitter is both revolutionary and disruptive,” Jordan Rohan, an analyst at Stifel Nicolaus, wrote in the note yesterday. “Twitter is the most powerful, flexible, and disruptive of the social media platforms, giving it significant scarcity value.”
Even with the volatility in trading, Twitter shares have more than doubled since the initial public offering. The stock fell 1.6 percent yesterday to close at $60.57 in New York.
Rohan said Twitter should be judged more on its future potential than current metrics. The unprofitable company, which has one-fifth the membership of Facebook Inc. (FB), could grow ad revenues six-fold in the next four years, according to the note. Twitter could eventually generate a higher revenue per user than Facebook, Rohan wrote.
“We believe this value is hard to quantify and does not yet show up in earnings,” Rohan said. “Over time, we believe the company will harness the power of this strategic position, benefiting consumers and shareholders alike.”
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