Deutsche Bank Previews Facebook Q4 Earnings, Remains In The 'Bull Camp'

Deutsche Bank gave its preview on Facebook Inc FB Friday ahead of the company reporting earnings on January 28. The firm maintained a Buy rating and $90 price target.

Analyst Ross Sandler felt that the stock’s muted performance since March along with upwardly revised estimates could help Facebook’s shares move higher on its Q4 results.

Facebook’s “biggest driver” in 2015 will be video, according to Sandler, as the “company has been gearing up for video for years with several pit-stops,” and the firm’s “checks suggest this is the year where it finally hits in size.”

Sandler also thought that Q4 EPS will come in slightly above the consensus estimates of revenue at $3.78 billion with EPS of $0.48. Deutsche Bank currently estimates revenue below consensus at $3.741 billion with EPS of $0.49, $0.01 above consensus.

The firm’s $90 price target was based on a 40x P/E, 20x EBITDA and 2.5 percent FCF Yield, with a blended average of 2015 and 2016 estimates.

Sandler concluded that being a contrarian in the past on Facebook has worked well, but even with most of the consensus currently long, Sandler “remained firmly in the bull camp” on the stock.

Facebook recently traded at $78.07, up 0.58 percent.