TWTR

Twitter Trading Higher Ahead Of July 23 Earnings

Twitter Inc. (TWTR) is inching toward the February 2020 high in the upper 30s in Monday’s U.S. session, as speculators place their bets ahead of the July 23rd Q2 2020 earnings release. The stock fell nearly 8% after missing Q1 2020 profit estimates in April, when the company disclosed that advertising revenue fell 27% in the last three weeks of March, as a result of the COVID-19 pandemic. It bottomed out quickly and has risen nearly 30% since that time.

D.C. Critics Take Aim At Twitter

The uptick comes less than two weeks after a report the social media giant is getting ready to build a subscription service that could significantly reduce spam, bots, trolls, and other user distractions. Growing disputes with the Oval Office have dampened renewed buying interest to some extent, with the President and members of Congress complaining that Twitter and Facebook Inc. (FB) are exhibiting bias against conservative opinions.

A July job listing on the Twitter site appears to confirm the initiative, declaring “we are a new team, codenamed Gryphon. We are building a subscription platform, one that can be reused by other teams in the future. This is a first for Twitter! Gryphon is a team of web engineers who are closely collaborating with the Payments team and the Twitter.com.” The company has neither confirmed nor denied the contents of the listing.

Wall Street And Technical Outlook

The news hasn’t impacted cautionary Wall Street consensus in the last two weeks, with a ‘Hold’ recommendation computed from 5 ‘Buy’, 19 ‘Hold’, and 2 ‘Sell’ ratings. If confirmed at this week’s earning’s release, the subscription platform is likely to lift a number of Hold ratings into the Buy column, adding to rally momentum. Price targets currently range from a low of $23 to a street high $43, while the stock is now trading $4 above the median $31 target.

Technical speaking, Twitter could easily add to recent gains and lift into 2019 resistance at 45.85. That price level also marks the 2013 initial public offering’s first trade, which has acted as resistance since a 2014 breakdown. A breakout above that barrier could have a highly-positive impact on sentiment, perhaps allowing this perennial laggard to finally break out of a multiyear range and post new highs.