Macquarie Research lowered its rating on shares of Twitter to “neutral” from “buy” on Wednesday, saying the best is behind the stock after moving nearly 50 percent move higher since the firm upgraded the stock in April.

“After [the] recent rise in the stock, valuation will likely limit upside from current levels,” the firm said in a note to investors.

Twitter stock fell nearly 1 percent in premarket trading Wednesday. The company’s shares are up 86 percent this year at Tuesday’s close of $44.71 per share.

“While product improvements are a positive for current users, we don’t see it having dramatic impacts on Twitter’s ability to attract new users,” Macquarie Research said.

Macquarie said its Twitter rating raise in April was for five reasons: “negative headlines created a buying opportunity,” the company’s business had both strong momentum and an attractive valuation, while Twitter was also improving both its profitability and its product.

“While we expect business fundamentals to continue to improve … the valuation, after the recent rise in the stock, will likely limit upside from current levels,” Macquarie said.

The firm also raised its price target on Twitter shares to $42 from $36.

Source: Investment Cnbc
Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade