Analysts finally weigh in on Twitter

The 25-day quiet period on the stock ends, allowing companies to rate it. The reactions are mixed.

By Benzinga Dec 2, 2013 3:55PM

Credit: © Kacper Pempel/Reuters
Caption: People holding mobile phones are silhouetted against a backdrop on which the Twitter logo is projectedBy Tim Parker

Monday not only means Cyber Monday, it also marks the end of Twitter's (TWTR) 25-day quiet period.

As expected, some of the high-profile underwriters of the IPO issued ratings on the stock in the early morning hours Monday.

During the first 25 days of trading, companies involved in the IPO are not permitted to issue ratings or guidance. Some of those underwriters include JP Morgan Chase, Morgan Stanley, Goldman Sachs, Bank of America and others.

Of those companies, here’s what we know so far:

  • JP Morgan initiated coverage on the stock with a "neutral" rating and a $40 price target implying that at least for now, Twitter’s upside has peaked.
  • Morgan Stanley gave the stock an "equal weight" rating.
  • Deutsche Bank initiated coverage with a "buy" and a $50 price target.
  • Goldman Sachs rated the stock a "buy" and announced a $46 price target.
  • Bank of America was the most critical, initiating coverage with an "underperform" rating and a $36 price target.

That covers all of the major underwriters on the stock and surprisingly, the initiated coverage wasn’t as bullish as the street expected. Twitter closed at $41.57 Friday putting it somewhere in the middle of the various price targets. Only Deutsche Bank sees large-scale upside ahead for the stock.

A Seeking Alpha article pointed out that on the days leading up to the expiration of the quiet period, a stock tends to rise. That was definitely the case last week as the stock rose 6.4 percent -- off its recent lows. This would indicate that positive coverage was priced into the stock but with the new coverage mixed, the stock may experience selloff during Monday’s trading session. In the premarket, the stock is already down about 0.6 percent.

Since Twitter’s hugely successful IPO, the stock has struggled to log any further upside. 

The stock is down about 7.4 percent from the close on its IPO day. While chart patterns have muted validity with such a young stock, early indications show a downward trajectory.

Disclosure: At the time of this writing, Tim Parker had no position in the above mentioned stocks.

Read more from Benzinga

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
266 rated 2
485 rated 3
660 rated 4
586 rated 5
652 rated 6
640 rated 7
504 rated 8
289 rated 9
159 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.