Twitter Inc. was downgraded to market perform from market outperform at JMP Securities on Wednesday due to “limited visibility” around engagement growth. The downgrade comes a day after Twitter’s new permanent CEO Jack Dorsey announced plans to cut 8% of its workforce, or roughly 350 people. While the company’s new management should stabilize Twitter, analysts at JMP Securities said they continue to see engagement growing below that of industry peers, which they believe will impact monetization longer term. The job cuts, which mostly affect people in engineering roles, suggests that it could take time for the organization to return to growth and begin capitalizing on product innovation, engagement and monetization, the analysts said. While JMP previously had a $43 price target on Twitter’s stock, it believes the company now has an “implied valuation” in the low $30s. Shares of Twitter fell 0.8% in premarket trade, putting the stock on track to open around $28.83. Its shares are down 21% over the last three months, vastly underperforming the S&P 500, down 5%.
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