Analysts Split On Facebook Outlook
On the same day that one analyst downgraded Facebook share, another one raised his price target on the social networking giant.
Early on Thursday, Pivotal Research Group’s Brian Wieser downgraded Facebook from a “buy” to “hold,” suggesting the market has lately gone giddy about the stock after being bearish for so long. In particular, he suggests that investors are overly optimistic about the potential for video advertising on the site.
Wieser maintains a $48 price target on Facebook.
Ben Schachter of Macquarie Securities subsequently issued his own research note, raising his 12-month price target on Facebook from $49 to $62 on the growth of its mobile ad business. Schachter estimates Facebook’s mobile app ads alone will generate $185 million in revenue of about $185 million in Q3, up from $65 million in Q1.
Facebook also added new
calls-to-action to the app ad unit, including terms like Open Link, Shop Now, and Play Game, that could further expand the market for the ads.
In addition to the mobile upside, Schachter, who has an “outperform” rating on Facebook, is also more bullish than Wieser on the expected rollout of video ads in the news feed.