Periscope surfaces Twitter above key $50 level

Published Wed, Apr 1 201510:59 AM EDT

A bullish reaction to live video application Periscope pushed Twitter shares up 5 percent in one week, to above a key level of resistance at $50 a share. Wall Street gave the final boost Wednesday, as a bullish note from Jefferies boosted Twitter's stock as much as 3 percent in morning trading to break $51 a share. Source: FactSet Along with Twitter's live streaming innovation, Jefferies cited increasing advertising dollars, leveraging logged-out users and international opportunities. "Continued product improvements including more integrated video and the recent Periscope launch should help increase engagement," wrote Jefferies' Brian Pitz. "By '17, online video ads could be a $17 billion-plus per year opportunity in the U.S. and TWTR is well-positioned to capture a meaningful piece of that spend." The analyst initiated coverage of Twitter with a "buy" rating and a $65 price target, which represents a 30 percent rally from Tuesday's closing price. Fewer than half of the analysts who cover Twitter recommend buying the stock, according to FactSet, a surprisingly bearish take on a company that went public less than two years ago. Read More Best cord-cutting trade is a 92-year-old company Just as importantly, if Twitter can stay above the $50 level Wednesday, buyers who rely on charts to make investment decisions should come back into the stock. The stock traded above that level earlier this year, but failed to hold it. "Twitter was strong all day (Tuesday), but gave in to market pressure," wrote Scott Redler of T3 Live in a Wednesday morning note to clients. "See if it can continue to build above $49.50 for more upside." Twitter shares are up 42 percent this year and more than 60 percent from an all-time low hit last summer on concerns about user growth and innovation. "Periscope provides the tools and infrastructure to support the notion that everybody is now capable of being an on-the-scene news reporter; video was the last missing piece of the puzzle and Periscope now provides a platform to support global broadcasts at scale," the Jefferies note said. Pitz gets to his $65 price target by applying a 38 multiple to his 2016 cash flow estimate. Jefferies estimates that CEO Dick Costolo can solve one issue that has plagued the stock: How do you make money off the millions of people who look at Twitter without a log in? Jefferies estimates that Twitter can leverage those 500 million logged-out users to $1.3 billion in annual revenue by getting just half of the annual revenue per user of logged-in users. Said Jefferies: "Twitter has an opportunity to reach and monetize 'logged out' users. In addition to its 288 MM MAUs, 500MM+ UVs come to Twitter each month without logging in. These UVs are not currently served much content or any advertising."

Periscope app

Source: Periscope

A bullish reaction to live video application Periscope pushed Twitter shares up 5 percent in one week, to above a key level of resistance at $50 a share.

Wall Street gave the final boost Wednesday, as a bullish note from Jefferies boosted Twitter's stock as much as 3 percent in morning trading to break $51 a share.