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UPDATE: Citigroup Raises Price Target for Facebook, View as 'Best Growth Story in the Internet Sector'

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In a note released Tuesday, Citigroup analyst Mark May reiterated the firm's Buy rating on Facebook (NASDAQ: FB) and raised the price target from $70 to $85.

In raising the price target May looked to three key points: the WhatsApp acquisition, ads on Instagram, and video ads on Facebook.

Looking to 2014, May outlined four themes he believes will continue to drive growth: 1) continued RPM (revenue per thousand ad impressions, or monetization) gains due to the mix shift toward higher valued News Feed ads and from increases in like-for-like ads from improved targeting & analytics; 2)continued growth in mobile app adds as installs remain in high demand and adoption of app engagement ads; 3) monetization of Instagram (e.g., see recent $100mn contract with Omnicom); 4)wider rollout of video ads on Facebook and Instagram, which they believe could have 2x-plus eCPMs than standard ads.

At last check, Facebook was trading down 1 percent at $71.31.

Latest Ratings for FB

DateFirmActionFromTo
Dec 2014MKM PartnersInitiates Coverage onBuy
Nov 2014Hilliard LyonsInitiates Coverage onLong-term Buy
Nov 2014Morgan StanleyInitiates Coverage onOverweight

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Citigroup Mark MayAnalyst Color Price Target Reiteration Analyst Ratings

 

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