Cowen cuts revenue estimates for Twitter Inc (TWTR) as Cantor lifts estimates for Facebook Inc (FB)

Cowen and company has weighed in on Twitter Inc (NASDAQ:TWTR), cutting its ad revenue estimates for the company. The cut in ad estimates came after the analysts took a closer assessment of Twitter’s new and old ad formats.  Something exciting about Twitter is that the time that users spend on the platform has increased. Cowen reiterated Market Perform rating on Twitter but chopped its price target on the stock to $34 from $38. Twitter’s new user acquisition remains a challenge with Cowen noting a disturbing progress in the U.S.

In view of Twitter’s ad format issues, Cowen deemed it fit to cut its 2H2015 estimates for Twitter. As such, the company expects fiscal 2015 ad revenue to come in at $1.82 billion, representing potential uptick of 46%. Cowen had previously estimated nearly 50% uptick in fiscal 2015 ad revenue.

Twitter Inc (NASDAQ:TWTR)’s total revenue for 2015 is expected to be come in at $2.08 billion, representing an increase of 48% YoY. The firm initially predicted revenue uptick of 54% YoY.

Cantor’s take on Facebook Inc (NASDAQ:FB)

Cantor has reiterated Buy rating on Facebook Inc (NASDAQ:FB). The firm also raised its price target on the stock to $100 from $92. The positive move on Facebook by Cantor was primarily supported by the increasing shift of ad dollars to the Internet from traditional TV. Facebook’s growing position in mobile and its ownership of assets such as WhatsApp, Instagram and Oculus also impress Cantor.

Ad spending on the Internet is expected to increase at compound annual growth rate of 15% over the next few years. By 2020, the Internet is expected to overtake TV as the largest advertising medium. Given Facebook’s dominant position in the social network market place and its rapidly burgeoning mobile numbers, the company is well-situated to benefit from the shift of ad spending to the Internet. Cantor expects Facebook Inc (NASDAQ:FB)’s revenue to increase at the rate 30% over the next five years.