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. (NYSE: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.
Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.