Twitter’s (TWTR) stock rallied 11 percent yesterday to close at $33.77 in New York after Nomura Securities upgraded the company to a buy.
The uptick ended a nine-day decline for Twitter, and was the stock’s biggest jump since April 15.
“We believe that the market has now priced in the expectation that Twitter remains a niche social media product,” said Anthony DiClemente, an analyst at Nomura who wrote the report. “We believe risk/reward is much more favorable now, given the possibility that product enhancements rejuvenate user growth.”
Twitter’s share price is still down 47 percent so far this year, but Nomura’s target of $43 would claw some of that back.
“I think there’s a very good chance that user growth reaccelerates from here, given product enhancements, given international growth,” added DiClemente. “When you think about Twitter that way, with over a quarter of a billion users, it’s hard to imagine a valuation that is a lot lower than where it is today.”