JPMorgan Upgrades Twitter, Names Stock 'One Of Our Top Picks'

Twitter Inc (NYSE: TWTR) is well-positioned to take advantage of online advertising growth in 2021, according to JPMorgan.

The Twitter Analyst: Doug Anmuth upgraded Twitter's stock from Neutral to Overweight with a price target lifted from $52 to $65.

The Twitter Thesis: The online advertising market is expected to reaccelerate in 2021 as the COVID-19 recovery ushers in a "return to normalcy," Anmuth wrote in an industry-wide report. Twitter in particular is positioned to show the "biggest rebound" as it suffered a "pandemic-driven ad decline."

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Anmuth said Twitter's management deserves credit for its re-built ad tech through the new Ad Server rollout and the rollout of Map 2.0.

Twitter's management is hosting an Analyst Day presentation in February and this represents a potential positive catalyst for the stock. In addition, Twitter remains in the crosshairs of activist investors who are exerting pressure while the ongoing share buyback program can help support the stock.

Anmuth said Twitter is "one of our top picks for 2021" as it continues to trade at a notable discount compared to similar social media platforms like Snap Inc (NYSE: SNAP) and Pinterest Inc (NYSE: PINS). The research firm's revised $65 price target is based on 30 times 2022 estimated EBITDA which also equates to 9.5 times 2022 revenue estimates.

TWTR Price Action: Shares of Twitter were trading higher by 4% to $54.95 at publication time.