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Why Twitter Inc (TWTR) is Hardly Out of the Woods

Twitter Inc (TWTR) is getting a news-induced lift, but Wall Street isn't sold on the social media stock

Aug 10, 2015 at 10:46 AM
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Twitter Inc (NYSE:TWTR) shares have had a rough go of it since the company underwhelmed the Street with its quarterly active user stats. Since its July 28 close at $36.54, the microblogging stock has plunged 23.4% to trade at $28. Today, however, TWTR is up 3.5% on some well-received news.

First, the firm revealed a multiyear partnership with the NFL to feature more pro football content on the social media platform. Second, TWTR said it will consider shuffling its board, which could include the departure of former CEO Dick Costolo.

On the sentiment front, Monness Crespi Hardt upped its rating to "buy" from "neutral." This represents a break from the wider trend, as 54% of analysts currently maintain lukewarm "hold" assessments toward TWTR. It should be noted, however, that the stock's consensus 12-month price target of $40.48 stands in territory not explored since late April.

Separately, traders have displayed near-extreme levels of skepticism, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, TWTR's 10-day put/call volume ratio across this trio of exchanges is 0.59 -- in the 98th annual percentile.

In short, the sentiment landscape seems to match Twitter Inc's (NYSE:TWTR) longer-term technical performance. Should the equity resume its slide, though, future price-target cuts are a possibility.
 
 

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