While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Twitter, Inc. (TWTR) climbed 2% today after SunTrust Robinson Humphrey upgraded the microblogging giant from neutral to buy.
So what: Along with the upgrade, analyst Robert Peck planted a price target of $45 on the stock, representing about 40% worth of upside to Friday's close. So while momentum traders might be turned off by Twitter's price pullback in recent months, Peck's call could reflect a sense on Wall Street that its growth prospects are becoming too cheap to pass up.
Now what: According to SunTrust, Twitter's risk/reward trade-off is particularly attractive at this point. "We believe Twitter is one of the few Platforms of the Internet (Google, Amazon, Facebook, LinkedIn) that has a long runway in its core business (owning the "Interest Graph")," said Peck. "Platforms of this scale are unique assets that provide interesting optionality over time." When you couple those long-term prospects with Twitter's still-beaten stock price -- off more than 50% from its 52-week highs -- it's tough to disagree with SunTrust's bullishness.
