Twitter stock price surges as Mizuho ends bearish assessment

Shares of Twitter (NYSE:TWTR) surged 5% higher today after Mizuho upgraded the stock from “Underperform” to “Neutral”. The tech giant is due to report its quarterly earnings on Thursday.

Fundamental analysis: Stock upgraded, price target lowered

Mizuho’s analyst James Lee upgraded Twitter stock to “Neutral” as risks associated with the coronavirus outbreak are mostly priced in. However, Lee downgraded the price target for Twitter stock from $35 to $28, around $2 lower than the current market price. 

Lee said that Twitter is likely to have taken a significant hit on revenue due to the COVID-19 outbreak due to the company’s exposure to online ads. With that being said, Lee downgraded the second-quarter revenue estimate to negative 26% year-over-year, from the previous forecast of 10% higher in the quarter. 

Similarly, analysts from RBC Capital maintained a “Hold” rating on Twitter stock, keeping the price target at $33.00. Overall, the analysts consensus on Twitter stock is a “Hold”, with an average price target at $32.14.

Twitter is scheduled to report its quarterly earnings on Thursday. For the last quarter ended December 31, Twitter reported a revenue of $1.01 billion and net profit of $119 million.

Technical analysis: Stock price testing important resistance

Shares of Twitter surged around 5% today on Mizuho’s upgrade of the stock. The stock price is now testing the $30 handle, which hosts a confluence of two important resistances - the ascending trend line and 50% pull back of the coronavirus-triggered selloff. 

If the buyers are successful in pushing the price action above this resistance, the next zone of interest should be between $32 and $36. This area should come into play if Twitter reports better-than-expected quarterly earnings. 

On the downside, the price action is supported by the 200-DMA trending near the $27.50 handle, while the horizontal support is located above the $26 mark. 

Summary

Shares of Twitter are trading around 5% higher today after Mizuho ended its bearish assessment of the stock by upgrading it to “Hold”. The Tokyo-based bank also lowered the price target for the Twitter stock from $35 to $28.