Nomura Downgrades Facebook, Says Stock's Negatives Outweigh Positives

Facebook, Inc. FB's "underwhelming" second-quarter results prompted Nomura to downgrade the stock Thursday.

Nomura Instinet's Mark Kelley downgraded Facebook from Buy to Neutral with a price target lowered from $228 to $183.

Facebook's earnings report held multiple negative readouts, Kelley said in the downgrade note. (See the analyst's track record here.)

They include:

Net user adds haven't been this light since the third quarter of 2014.
The "biggest disappointment" in user adds comes from the Asia-Pacific region, with just 21 million net new users.
User adds in U.S. and Canada were flat.
Facebook's guidance and outlook implies the Street's estimates need to be "drastically cut."
Even if the guidance is conservative, there is a "lot of time between now and when that conservatism might be realized."
Monetization of platforms like WhatsApp is unlikely to start for a "considerable amount of time."

The quarter did have several positive factors, Kelley said:

Investments in privacy and security are necessary.
Facebook's disclosure of 2.5 billion people using at least one platform is encouraging.
The companyis not ignoring new initiatives and is testing payments on WhatsApp in India.

Facebook shares were trading down 18.5 percent to $177.30 at the time of publication Thursday.