BofA/Merrill Lynch Positive on Twitter (TWTR) 'Buy' Button

BofA/Merrill Lynch analyst Justin Post weighed on Twitter, Inc. (NYSE: TWTR) after the company announced it is testing a “Buy” button.

Post views the “Buy” button more as a new direct response ad format than as an ecommerce platform/marketplace that would compete with Amazon and eBay. "We note eCommerce and social do not always gel (such as the Facebook Gifts initiative) and it can be difficult for media companies to manage eCommerce inventory; so we think it will be best for Twitter to stay out of the fulfilment business," he notes.

While the firm does not know the financial terms, they said a successful direct response ads can have higher click-through rates and can yield
well over $5.00 per 1,000 Timeline View. This would be above the 2Q Twitter’s US ad revenue per 1,000 Timeline Views was at $3.87.

The firm maintained a Buy rating and price target of $60, saying they remain constructive on Twitter’s ad monetization opportunity.

For an analyst ratings summary and ratings history on Twitter, Inc. click here. For more ratings news on Twitter, Inc. click here.

Shares of Twitter, Inc. closed at $50.70 yesterday.

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