Twilio Inc. (TWLO) shares rose more than 3% during Thursday's session after KeyBanc reiterated its Overweight rating and raised its price target to a Street high of $248 per share, implying a 9% premium to Wednesday's closing price. KeyBanc believes that Twilio's platform can withstand price competition and is moving up-stack into the Contact Center as a Service space. In addition, the analyst believes that Twilio will become a key enabler of digital acceleration over the next few years.
The move follows similar price target increases over the past few weeks. Goldman Sachs, Northland, and Piper Sandler raised their price targets to $225, citing increases in software industry valuations amid the COVID-19 pandemic.
Twilio has also been in the spotlight since New York City announced that it would use the platform to power its contact tracing efforts. With the recent jump in COVID-19 cases around the nation, other states and municipalities could follow suit.
From a technical standpoint, the stock broke out to fresh highs during Thursday's session after a period of sideways trading. The relative strength index (RSI) moved near overbought territory with a reading of 69.53, but the moving average convergence divergence (MACD) remains neutral. These indicators suggest that the stock could see near-term consolidation before moving higher over the coming sessions.
Traders should watch for consolidation above trendline support over the coming sessions. If the stock breaks down, traders could see a move to retest lows or the 50-day moving average at $182.79. A further breakdown could lead to a close of the gap from early May near the 200-day moving average at $124.62. If the stock continues to breaks out, traders could see a move toward trendline resistance at around $240.00.
The author holds no position in the stock(s) mentioned except through passively managed index funds.