Social media has benefitted during the pandemic, as an increase in user engagement has been felt across different platforms. Twitter (TWTR) has made the most of the COVID tailwinds, too, with an uptick in mDAUs (monetizable daily active users). The market has reacted in kind, and shares are up by 46% since the turn of the year.

Deutsche Bank analyst Lloyd Walmsley believes more share appreciation is on the way. In fact, his growing confidence in the Twitter story has just resulted in upgrading the stock from Hold to Buy, while boosting the price target from $36 to $56. This figure represents possible upside of 19% from current levels. (To watch Walmsley’s track record, click here)

While the pandemic’s impact has resulted in people spending more time on social media, Twitter has also paid the price for the economy’s contraction. The reductions in budgets across the ad industry have impacted Twitter’s main source of revenue. For Walmsley, the ad industry’s recovery is a vital part of his bullish Twitter thesis.

“We have been excited about the medium-term prospects for Twitter but unable to get more bullish given weak advertising channel feedback,” Walmsley said. “We are now starting to hear more positive feedback in the ad channel and would take advantage of the opportunity to build a position now before a stronger ad recovery takes hold and we get into the period of 2021 excitement.”

Walmlsey believes next year has in store several catalysts to boost Twitter’s growth. These include the return of sport events, both domestically with full seasons across the NFL, MLB and NBA, and internationally, with the Olympics, the Euro Cup and World Baseball Classic all to look forward to.

Additionally, following the events of 2020, the analyst expects the return of a strong movie and TV show release schedule.

This strong event lineup, Walmsley estimates, could bring in an extra $45 million to $85 million in ad revenue, resulting in a contribution between 1.6% and 3.0% to 2021 ad revenue growth.

Walmsley’s bullish thesis is not one currently shared by the majority of his colleagues. Twitter currently has a Hold consensus rating based on 7 Buys, 22 Holds and 1 Sell. Over the next 12 months, the analysts forecast downside of 12.5%, given the $41.13 average price target. (See Twitter stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.