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Analysts Optimistic Upon Twitter Inc. (TWTR) Naming Jack Dorsey as Permanent CEO

By Howard Kim 

This week, Twitter Inc. (NYSE:TWTR) announced the appointment of Jack Dorsey, the company’s co-founder, as its permanent CEO. Adam Bain, the company’s Head of Products, was appointed as the company’s Chief Operating Officer. Analysts from SunTrust Robinson Humphrey and Axiom Capital weighed in.

On October 5th, Robert Peck of SunTrust Robinson Humphrey maintained a Buy rating on the social media company. He referred to Bain’s appointment as COO critical.

Peck commented, “While we are very pleased with today’s announcements, we think that ultimately the company and Mr. Dorsey will be judged on their execution. Mr. Dorsey alluded to new products coming that should not only engage a wider mass audience, but also serve their more deeply engaged users. No details were given on these products, but most expect Project Lightening shortly. We have noticed an increased product launch cadence under Mr. Dorsey in his interim CEO role and would look for this to continue. Importantly, we think this applies to advertising products as well, that can hopefully increase ROIs and ad spending.”

As per TipRanks’ statistics, Robert Peck has a 91% success rate on Twitter’s stock out of 39 ratings in total. Since 2013, he has earned an average return of 34.1% on Twitter when measured over a one-year horizon and no benchmark.

Separately on October 5th, Victor Anthony of Axiom Capital upgraded his rating on Twitter to Buy from Hold, while setting a price target of $37. Anthony says Dorsey’s appointment is a positive.

Anthony comments, “Recent media attention has called for the imminent appointment of Jack Dorsey as the permanent CEO, as well as board changes. We agree that the CEO role is likely to be filled near-term. We believe Mr. Dorsey has the backing of the board, several shareholders, and employees.”

Dorsey is also the CEO of Square, Inc., a financial services and mobile payment company, which is expected to go public this year. Talking about the dual role, Anthony said, “We are fine with him keeping a dual role as CEO of Square to see the IPO through to completion. However, at some point in the future he would need to step away from Square to focus solely on Twitter. The pace of innovation at both companies is rapid and competition is intense, necessitating dedicated CEOs.”

Based on TipRanks’ statistics, out of 28 analysts who have recently rated Twitter’s stock, 14 have rated it as a Buy, 13 have rated it as a Hold, and 1 has rated it as Sell. The consensus price target for the stock is $39.04, an upside of nearly 38% from current levels.