MKM Partners Initiates Facebook At Buy, Cites 'Superior' Business Model

Rob Sanderson of MKM Partners initiated Facebook FB with a Buy rating on Friday with a $105 price target. Sanderson notes that Facebook should benefit over the coming years as the company is well positioned to attract video ad dollars. The analyst adds that the company's “superior” business model gives it a distinct advantage among social media companies as video ads will fuel growth for the next 10 years. Sanderson also notes that Facebook's “exceptional” margin structure is superior to any major media company and the company is able to maintain high margins despite heavy investments. In addition, Sanderson sees incremental growth drivers coming from monetizing other platforms including WhatsApp and Instagram. In fact, the analyst sees Instagram monetization likely being a significant contributor in 2016-2017.