Market-Defying Twitter Stock Ripe For Upgrades

TWTR stock touched a three-year high of $35 last Thursday

Managing Editor
Feb 12, 2018 at 10:17 AM
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Even as the major stock market indexes suffered their worst week since 2016, Twitter Inc (NYSE:TWTR) stock tacked on an impressive 21.6% last week -- its best single-week performance since February 2015 -- thanks to well-received earnings. This morning, analysts have taken notice, with BMO raising its price target on TWTR stock to $28 from $22. Nevertheless, the new target still represents a discount to the equity's current perch.

Despite the stock's outperformance of late, 24 of the 29 analysts covering TWTR rate it a "hold" or worse. Furthermore, the equity's average 12-month price target of $27.16 sits below the stock's current perch of $31.71. A round of upgrades and/or additional price-target hikes could provide a boost to the social media stock in the near future.

Twitter stock is up 32% so far in 2018, riding last week's earnings-induced bull-gap to a two-year high of $35 on Feb. 8. The stock has now more than doubled since its April low of $14.12, and has outperformed the broader S&P 500 Index (SPX) by nearly 55 percentage points during the past three months. 

Looking at sentiment data, TWTR's Schaeffer's put/call open interest ratio (SOIR) of 0.87 ranks in the 98th percentile of its annual range. In other words, near-term options traders are unusually put-heavy on the social media stock. Continued technical outperformance could lead to an unwinding of those bearish bets. 

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