UPDATE: Macquarie Upgrades Twitter, Inc. (TWTR) to Neutral

Macquarie upgraded Twitter, Inc. (NYSE: TWTR) from Underperform to Neutral with a price target of $36. Analyst Ben Schachter sees limited downside.

"While we remain cautious on TWTR shares, we believe expectations have been reset and improving fundamentals will limit downside risk at current valuation. We are not yet comfortable with Outperform rating as user growth trends are still an issue. In order to make the jump from niche to mass-market social media platform, TWTR must demonstrate it is able to reaccelerate user growth rates. Until we see meaningful evidence that this has begun to occur, we are reluctant to get more constructive on the name," said Schachter.

"We highlight the following key drivers for our upgrade: Improving monetization driving outperformance on top and bottom lines . . . Still cautious on user growth . . . Management changes are steps in the right direction . . . Meaningful opportunity to grow monetization through new products & formats . . . Valuation," he added.

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 $38.31 yesterday.

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