Shares of Twitter (NYSE: TWTR) climbed 6.1% on Wednesday, following an analyst upgrade.
Pivotal Research analyst Michael Levine boosted his rating on Twitter's stock from hold to buy. He also raised his price forecast from $36 to $59.75, or more than 30% higher than the stock's closing price of $45.33.
Levine sees several catalysts that could drive Twitter's share price higher. He likes the social media company's moves to make it easier for new users to join the platform and start tweeting. He's also bullish on Twitter's direct-response marketing initiatives, as well its rumored subscription service. Additionally, Levine expects the 2021 Olympics to boost engagement on the platform.
In turn, Levine recommends that investors buy the stock ahead of Twitter's upcoming third-quarter earnings report, which he thinks could ignite a rally in its share price.
Twitter has long struggled to effectively monetize its platform. It's trailed far behind industry leader Facebook in this regard, and its stock has unperformed its larger rival by a wide margin in recent years. But if Levine is correct, Twitter could begin to close the gap with its competitors, and its shares could rally in kind.
10 stocks we like better than Twitter
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Twitter wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 1, 2020
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.