Analysts upbeat on Facebook shares

on Dec 8, 2017

Facebook shares received an upbeat review from freshly initiated coverage by Evercore ISI. The financial services group was also positive on other FANG stocks, in a recent research note to clients.

After a tricky month, Facebook shares closed 2.32% higher at $180.14, Thursday, at the end of the US trading day.

The Facebook stock price has risen by some 50% over the course of 2017 so far. However, Thursday’s close is still a little below the record high of $183.03 it hit towards the end of November.

Strong price target

Evercore ISI’s analyst Anthony DiClemente, was most positive on Facebook among all the tech giants he recently reviewed.

The analyst wrote he estimates a 30% annual growth rate increase in ad revenues for the social media favourite, surpassing $100 billion by 2021. DiClemete has also pencilled in growth to 3 billion users.

“Our conclusion is that Facebook shares are likely to outperform all other advertising companies, as it maintains substantial room for absolute user growth globally," DiClemente wrote in his research note.

He added stable trends in developed economies where, Facebook already has a strong market share, would be complemented by “anticipate[d] strong growth in emerging markets."

DiClemete’s price target for Facebook shares was set at $225 per share, an increase of around 29% from where it currently trades.

Facebook seen gaining on AI, video developments

JP Morgan analysts agree that Facebook is well-positioned to increase its company valuation. With Facebook’s investment in applying computer vision techniques to its content organization process, it’s possible the tech giant could be able to classify live videos in real time.

And, while some analysts expect the decision to invest some $1 billion in video to be a potential drag on profits, Morgan Stanley said it believes the firm could break even on that investment by 2018.

Facebook is betting on video being a strong driver of future revenues. That’s something a number of analysts appear to agree with, too, hence the recent outpouring of upbeat assessments of the Facebook stock.