Twitter Stock Touches Fresh 3-Year Peak After Analyst Predicts Big Ad Sales

TWTR shares have had a huge year

Josh Selway
Jun 12, 2018 at 9:38 AM
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Twitter Inc (NYSE:TWTR) is adding to its big year, rising 4.4% today to $43.23, and earlier touching a fresh three-year high of $43.37, thanks to a bull note from J.P. Morgan Securities -- which is also eyeing major upside from this weight management stock. The brokerage firm boosted its price target to $50 from $39, expecting increasing advertising revenues over the next two quarters, which should lead to stronger earnings through 2019. In fact, the analyst in coverage see the social media company with ad revenue growth of over 20% in the years to come. As one specific catalyst, the note mentioned Twitter's role in the 2018 FIFA World Cup.

TWTR stock was already up 72.5% year-to-date before today, and we should again call attention to the possibility of more bull notes in the future. That's because the vast majority of analysts tracking the equity are bearish, with just eight of the 30 in coverage handing out anything better than a "hold" recommendation. The average 12-month price target, meanwhile, sits all the way down at $31.09.

For their part, options traders have remained bullish. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows call buying more than tripling put buying during the past 10 days. The December 35 call actually saw the largest increase in open interest during this time, thanks to one trader who seemingly bought to open 29,800 contracts on Friday while simultaneously selling an equal-sized block of the June 20 calls.

In yesterday's trading, it would appear some traders were closing positions at the June 40 call, after Twitter stock rallied past the round-number mark. At the same time, others were likely betting on more upside, with new positions opening at the June 41, 41.50, and 42 calls. Still, call open interest for the equity sits in just 25th annual percentile.


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