In a report published Thursday, Jefferies analyst Brian Pitz upgraded the rating on Facebook FB from Hold to Buy, and raised the price target from $31.00 to $32.00.
In the report, Jefferies noted, “We upgrade FB to Buy as we think recent pressure on the stock has created a buying opportunity ahead of the expected July launch of video ads, which could be the company's next billion-dollar business. The val'n looks attractive at ~25x (ex-cash) our '14 Op EPS vs. a 30% CAGR, implying a reasonable 0.8x PEG. Longer-term, we expect FB will enjoy nice operating leverage as it deploys new ad products across its massive 1B+ user base.”
Facebook closed on Wednesday at $23.32.
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