Facebook Shares Up ~50% Over Last 18 Months; RBC Still Recommending As A Long

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Shares of Facebook Inc FB have gained more than 50 percent over the past year-and-a-half. However, RBC Capital Markets analysts still recommend taking long positions in the stock. Having said this, the experts introduced several key updates to their long thesis.

Related Link: Chart: Who Dominates The Mobile Apps Space Right Now?

Overall, RBC analysts believe Facebook is attractively valued, and that markets underappreciate the company’s product innovation initiatives and their impact on the site’s user and usage growth, long-term P&L potential and monetization momentum.

The three main updates introduced in the model are:

  • 1) The recently launched ad product innovations and improvements should drive top line upside.
  • 2) New video offerings should help augment engagement upside.
  • 3) Facebook’s messaging platforms provide substantial opportunities as the company increases monetization. “Facebook’s Messaging Platforms could generate more than $10 billion in 2020 Revenue, which would likely be well north of 10 percent of FB’s Revenue.”

RBC maintains an Outperform rating and $165 price target on shares of Facebook.

Posted In: Analyst ColorLong IdeasReiterationAnalyst RatingsTechTrading IdeasMark MahaneyRBCRBC Capital Markets
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