UPDATE: Goldman Sachs Reiterates Buy, $42 PT on Facebook Ahead of Earnings

Goldman Sachs maintained its Buy rating and $42 price target on Facebook FB ahead of the company announcing earnings for the first time as a public company on July 26. Goldman Sachs said, "The most important point, in our view, is Sponsored Stories will benefit ad impressions and CPMs for all of 3Q12 versus only partially in 2Q12. As a result, we see the delta between impression and DAU growth reaching its peak in June, leading to accelerating yoy growth in ad sales. In fact, we see Sponsored Stories offering the potential for considerable upside to our ad forecasts for the rest of the year. We continue to view Facebook as being a key beneficiary of the #TheIntelligentWeb, and reiterate our Buy rating. At around $29, FB trades at 148X and 46X our 2012 and 2013 FCF estimates of $539mn and $1.67bn respectively, and at 26X and 18X our 2012 and 2013 non-GAAP EBITDA estimates." Facebook closed at $29.11 on Wednesday.