Citi Offers Deep Dive on Facebook, Raises Price Target to $97

Citi analysts raised its price target on Facebook Inc FB by 6.5 percent to $97, an expected return of 18.8 percent against Wednesday's closing price of $81.67. In looking at the core areas of Facebook's business – active user growth, ad load, CPMs and engagement – Citi said that "only modest assumptions are necessary" to deliver strong growth moving forward.

Additionally, the analysts forecasted that there is strong revenue growth potential in the near term for Facebook's acquisitions, Instagram and WhatsApp. Each will provide more than $1 billion in revenue by 2017.

Citi's analysts said that over the past six months, during which Facebook gained 6.7 percent versus the 5.8 percent increase in the SPDS S&P 500 ETF Trust SPY, "shares have largely underperformed." However, moving forward, "Facebook can maintain ad revenue growth well above 20 percent through at least 2017."

Facebook is indicated 0.7 percent higher in premarket trading.