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Twitter ends three-day losing streak as analysts make bullish calls

A trader at the Twitter IPO at the NYSE.
Adam Jeffery | CNBC

Twitter shares snapped a three-day losing streak Tuesday after two firms made bullish calls on the stock, based on fundamentals and potential upside.

The stock gained about 2.5 percent Tuesday, after falling 11.5 percent on Monday.

Twitter shares have been under pressure as the company's board of directors remains split between those who want to sell the company and those who don't. Twitter and Salesforce.com continue to discuss a possible deal, sources told CNBC on Tuesday. Other large media and tech companies have reportedly also held discussions with Twitter.

Evercore ISI upgraded Twitter to hold from sell on Tuesday, basing its move on the recent plunge in the share price. The firm maintains its $17 price target on the stock.

In a note to investors, analyst Ken Sena said: "The rating improvement reflects the recent fallout in share price from a stalled sale process, which now places shares more in line with our $17 target. In addition, despite softer checks, we suspect that (third-quarter) guidance may prove sufficiently conservative given the first Presidential debate, the Olympics, and NFL Thursday Night games."

Deutsche Bank reiterated its buy rating, saying the company will top expectations when it reports third quarter financial results later this month.

"Amidst intense volatility around whether TWTR is acquired or not, we shift back to what we can track, i.e. — the fundamentals. Our checks point to a 'high end of the range' revenue print from TWTR," analyst Ross Sandler wrote in a note to clients Monday.

Twitter is expected to report third-quarter earnings on Oct. 27.