Top analyst downgrades Twitter, predicts sales miss

Chris Ratcliffe | Bloomberg | Getty Images

One of Wall Street's top analysts downgraded his rating on Twitter to market perform from outperform due to the risk the social network will miss Wall Street sales forecasts for the September quarter.

"We believe 3Q Street revenue estimates (+12% q/q) could prove aggressive given our recent ad checks and typically seasonally soft 3Q period," Raymond James' Aaron Kessler wrote in a note to clients Friday. "Further our checks indicated continued strong growth for Facebook and moreover for Instagram and believe Instagram monetization could be a near-term negative for Twitter revenues."

Kessler's forecast for Twitter's third-quarter sales is $649 million versus the Wall Street consensus of $682 million, according to FactSet. The company reports second quarter-earnings Tuesday and may disappoint investors then with its forecast for the current quarter, the analyst said.