11:51 AM EDT, 06/14/2024 (MT Newswires) -- Twilio's ( TWLO ) potential to have earnings upside over the next 18 months is limited because of the lack of a growth catalyst in the near to medium term and minimal remaining operating expenses efficiencies, Morgan Stanley said Friday in a note to clients.

The lack of a revenue catalyst over the next 12 to 18 months limits multiple expansion and potentially challenges the company's ability to meet Street expectations for 2025, Morgan Stanley said.

"The company is levered to the health of the consumer market and there are minimal incremental opex efficiencies remaining," the firm said. "As a result, we expect little multiple expansion over the next 12-months and see more attractive risk-rewards in our coverage."

Morgan Stanley downgraded Twilio's ( TWLO ) rating to equalweight from overweight and cut the price target to $60 from $70.

Shares of Twilio ( TWLO ) were down 3.8% in recent Friday trading.

Price: 53.55, Change: -2.14, Percent Change: -3.84