Facebook Shares Reach a New High Following Big UBS Raise

In a report published Monday, UBS analyst Eric Sheridan raised the price target on

from $72.00 to $90.00 and reiterated a Buy rating, noting continued pricing strength. Sheridan noted that UBS' advertiser channel checks indicate that Facebook's pricing strength in the fourth quarter has carried over to 2014 and is sustainable for longer than previous thought. UBS examined the improved quality of advertisers and increased frequency of higher CPM formats. Sheridan added that an Ogilvy study highlights declines in organic page reach from approximately 12 percent in October to about six percent in February. The analyst commented that this decline is “acting as an impetus for greater ad spend as brand advertisers seek to maintain their audience – outsized ROIs on FB are more than sufficient to justify this greater spend.” UBS reported that Facebook is gaining traction on with brands who use the platform as a means to “buy' the audience based on users' conversations. UBS specifically commented on the global partnership announced by Mondelez International which covers 52 countries and includes a “joint commitment to innovation, opportunities to opt into Facebook's beta-testing programs, access to research and capability building through immersion days in priority markets.” Shares of Facebook hit a new high of $71.99 on Monday following Friday's close of $69.80. Facebook is currently trading at $71.69, up 2.71 percent.