Morgan Stanley analysts think Twitter is still struggling. A lot.

In a note Thursday, analyst Brian Nowak and team lowered their expectations for how high the company's shares can rise, how many users it can add, and how much it can earn from ads.

They lowered their price target to $16 a share from $18 and maintained an "Underweight" rating on the stock. The shares fell about 2.7% to $16.80 in premarket trading.

From the note (emphasis theirs):

Engagement and New User Trends Remain Troubling... We believe TWTR's core user engagement remains in decline, as time spent per U.S. mobile user fell by an estimated 10% YoY in 1Q:16. This may be an improvement from the 30%+ YoY declines from last year, but stepping back, TWTR's time spent per user is already among the lowest in the social group ... and is still in decline. New user growth doesn't appear to be rebounding either, as quarter-over-quarter new mobile-app downloads were flat for the second straight quarter."

Twitter has been struggling to grow its number of monthly active users (MAU in the below graph) and catch on as a mainstream platform.

Morgan Stanley

Twitter's most recent earnings results showed it added 320 million users in the fourth quarter, below estimates and showing no growth from the same period in the prior year.

Morgan Stanley analysts are concerned that even in the first quarter, which is seasonally good for active-user growth, Twitter may not report strong numbers when it releases its results on April 26.

In a note Wednesday, the analysts said Twitter's recently announced deal with the NFL to stream games had limited revenue potential because the company would not be able to sell national advertising spots, according to Quartz.