In between laughing at your friend’s latest tweet, envying Beyonce’s new hairstyle debuted on her Twitter pic, and reading the latest stock news from TipRanks on your Twitter feed, you are receiving advertisements. And while you may have previously ignored them due to the fact that these ads were not interesting to you, Twitter Inc (NYSE:TWTR) just announced a way to make ads more relevant to its users.


Twitter’s tailored audiences

Tailored Audiences,” is Twitter Inc (NYSE:TWTR)’s new advertising product that will use web browser cookies and other browser data to connect the right ads with targeted viewers. Some analysts are eager to recommend BUY  or HOLD Twitter after learning that the product has the potential to reduce costs to advertisers while, at the same time, increase customers. But, there are still other analysts who are wary of stiff competition and recommend SELL Twitter as a precaution.

Ken Sena of Evercore Partners reiterated BUY Twitter Inc (NYSE:TWTR) with a $52 price target after recognizing the positive opportunities Twitter’s new advertising product will bring the company. “’Tailored Audiences’ will likely allow Twitter to place more relevant Promoted Tweets in users’ feeds which we expect will increase advertisers’ willingness to pay higher CPE’s (cost per engagement) in addition to driving higher overall engagements as well.” Ken even raised his EBITDA (earnings before interest, taxes, depreciation and amortization) for 2015 from $345 million to $415 million. Ken is ranked 406 out of 2301 analysts and has a 57% success rate of recommended stocks.

Twitter will be an advertising powerhouse

And, while analyst Carlos Kirjner agrees with Ken that Twitter Inc (NYSE:TWTR) will be a powerhouse in the online advertising world, he instead recommends HOLD TWTR and poses some questions. “For example, will Twitter’s growth be necessarily detrimental to Facebook Inc (NASDAQ:FB) or Google Inc (NASDAQ:GOOG), other online publishers or to traditional media companies?” Carlos believes, “the trio will steal a share from other online players, including Yahoo! Inc. (NASDAQ:YHOO) and AOL, Inc. (NYSE:AOL), especially because they are leading across all important online advertising formats, including video, mobile, and real-time bidding for programmatic display buying, the last of which is an especially rich area for Twitter.” But at the same time, “as the three improve online advertising in general, they may prompt an acceleration of ad buying that ends up expanding the total online ad pie, meaning their own share might not be as great as he’s currently modeling.” Carlos is ranked 821 out of 2301 analysts and has a 43% success rate of recommended stocks.

Even more cautiously, analyst Scott Kessler advises SELL Twitter Inc (NYSE:TWTR) based on the most recent advertisement development, “Despite this news, we see considerable competition, operational risks, and an excessively valued stock, and view the past two days of gains as enhanced selling opportunity.” Scott is ranked 1531 out of 2301 analysts and has a 48% success rate of recommended stocks.

Twitter Inc (NYSE:TWTR)’s technological capabilities are advancing and it’s hard to know which analyst has the right idea about the implications. While each analyst might make a good point, see how their past recommendations have fared in the market by downloading TipRanks and start making informed financial decisions today.

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