Facebook (NASDAQ:FB) stock was up a fraction, near $125, in midday trading on the Nas on Tuesday. This, despite positive comments from JPMorgan’s analyst Doug Anmuth reiterating the issue as his top FY 2017 large-cap pick in the Internet space with an ‘Overweight’ rating and $165 price target, implying 32% expected return.
Facebook shares — which moved above their 50-day and 200-day MA last Friday in heavy volume — a bullish signal, despite rallying 9% year-to-date, remain down 6.4% from their $133.50 all-time high reached on Oct. 24 through Tuesday’s close.
Anmuth cited a compelling valuation, noting Facebook stock fears are “largely overdone and continue to create a good buying opportunity”. The analyst, who believes FB’s sales growth will top expectations in the coming year, also said in his note to clients that concerns including potential for meaningful revenue deceleration, slowing ad load growth, fake news and ad metrics have contributed to the “recent wall of worry.” Further, the analyst told investors he also likes names like Netflix (NASDAQ:NFLX) and Google-parent Alphabet (NASDAQ:GOOG, GOOGL) among large-caps, and Yelp (NYSE:YELP) and Match Group, Inc. (NASDAQ:MTCH) among small & mid-caps.
Meanwhile, in a separate research note, Cowen’s John Blackledge raised his price target for Facebook stock by six points to $156, telling investors that based on his firm’s survey of 50 senior U.S. ad buyers conducted in December, Facebook demonstrated social leadership and rising video capabilities. Additionally, Cowen’s survey showed that 17% of ad buyers would use the social media giant’s video for a standalone brand campaign, up from 10% the prior year.
It should be noted that FB spent fiscal 2016 reorienting its audience of nearly 1.8 billion active users and growing toward a video-first platform. Apparently, and judging by Cowen’s survey numbers, the effort seems to be paying off. In 2016 Facebook users were estimated to have watched a total of 100 million video hours per day without “pre-roll” video ads. Additionally, according to a Recode report, Facebook is working with video publishers to start testing a “mid-roll” ad format on longer clips, a move that for now would allow Menlo Park to sell the ads and share the revenue with publishers, giving them 55% of all sales. That’s by the way the same split offered by Google’s YouTube in terms of content monetization. However, unlike YouTube, which lets any user participate in their revenue sharing program via original uploads, Facebook’s model is currently limited only to established media names.
Facebook Stock Action
Facebook lost $0.34 to $124.56 at the end of trading on Tuesday. Approximately 15 million shares exchanged hands, compared to the stock’s average daily volume of 22.35 million shares.
On valuation-measures, shares of Facebook have a trailing-12 and forward P/E of 48.02 and 24.03, respectively. P/E to growth ratio is 0.87, while t-12 profit margin is 30.42%. EPS registers at $2.59. The company has a market cap of $358.99B and a median Street price target of $155 with a high target of $180.
On trading-measure, Facebook stock has a beta of 0.32 and a short float of 24.3 million. In the past 52 weeks, shares of Menlo Park, California-based social networking giant have traded between a low of $89.37 and a high of $133.50, with its 50-day MA and 200-day MA located at $119.02 and $122.99 levels, respectively.
FB currently prints a one year return of about 28 percent compared with a 17.95 percent gain in the S&P 500.
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