UPDATE: Citigroup Initiates Facebook with Neutral, $35 PT on Decelerating Growth and High Multiples

Citigroup initiates its coverage on Facebook FB with a Neutral rating and a price target of $35. Citigroup comments, "Facebook has established itself as an Internet Utility. It could become the largest ‘Net Platform one day in terms of Revenue & Profits, given the size & engagement of its user base and its biz model. But with a 50X 2013 P/E, much of this potential has been priced in. Further, FB appears to have hit a Fundamentals Air Pocket, given its decelerating MAU growth (27% in '12 vs. 48% in '11 -- law of large numbers) and its softening ARPU growth (2% in '12 vs. 27% in '11 – economy, unmonetized Mobile channels, and correctly conservative Monetization strategy). Super-high multiples & Deceling growth don't mix well. Add a limited visibility Biz Model & an unproven Team and you have a Neutral." FB closed at $33.10 on Tuesday.