Bob Peck: We Still Like Twitter Stock If Jack Dorsey Becomes CEO

• SunTrust Robinson Humphrey analysts led by Bob Peck reiterated a Buy and $38 price target on Twitter Inc TWTR.
• Key shareholders support Jack Dorsey as the company’s permanent CEO.
• Peck and his team believe this “Helps Support a Potential Board Decision.”

The New York Times on Monday published an article informing that, “Some Twitter investors [including Rizvi Traverse] and Square investors are now publicly proclaiming that Mr. Dorsey is the right man for the job — both of them [the CEO position at both Twitter and Square].”

According to SunTrust, the support from prominent stockholders at both companies provides a boost in the firm’s confidence on Dorsey being the permanent CEO at Twitter. The experts believe this is very important for three reasons:

1) It proves there’s “coalescence of support” surrounding Dorsey.

2) The public endorsements support “a CEO decision that was previously ruled out - it enables the board to prioritize fiduciary responsibility over prior statement.”

3) Likely eliminates other candidates.

After seeing Dorsey’s job, analysts at SunTrust believe that he now counts with the support of several top executives at Twitter – to become the permanent CEO. Ultimately, “he or any incoming CEO will be judged on execution in expanding users, monetization, and utility.” As they have stated in many occasions before, SunTrust believes Dorsey is “the best candidate to be permanent CEO.”

Beyond the CEO search, the firm remains bullish on Twitter, “as it has become the broadcast medium across several demographics.” The firm thinks that next year “can shape up to be the base year of innovation and expansion that the company has been looking for, if Jack Dorsey becomes CEO.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.