Axiom's Anthony Wants Investors To View Facebook As Global Media Communications Platform

In a report published Tuesday, Axiom Capital Research analyst Victor Anthony maintained a Buy rating on

, while raising the price target from $105 to $117. Facebook is likely to report better-than-expected 2Q15 revenues of $4.034 billion, up 39 percent y/y, EBITDA of $2.515 billion, up 25 percent y/y and Non GAAP -EPS of $0.47. The company is poised to benefit from the rising demand for video and the willingness of advertisers to spend on Facebook. In the report Axion noted, "Merkle/RKG have reported that spend increased 69% YoY on FB in 2Q15, up from 63% in 1Q15, and Nanigans saw higher CTRs and higher CPMs in 2Q relative to 1Q." Analyst Victor Anthony commented, "We estimate Non -GAAP expense growth of 75% YoY (FY guidance of 50- 60%YoY). We model advertising revenue growth of 43% (down from 46.4% in 1Q15) but facing a 15pt easier comp, and payments revenue growth of 8% YoY." The contribution of mobile ad revenues to Facebook's total revenues is expected to increase from 73 percent in 1Q15 to 76 percent in 2Q. "Facebook should be viewed as a global media communications platform rather than a pure social media company, and investors should continue to assign premium multiples to Facebook's valuation," Anthony added.