Market Overview

Pivotal Research Lifts Target on Facebook from $35 to $45 Amid Stronger-Than-Expected Ad Growth


In a report published Thursday, analyst Brian Wieser from Pivotal Research raised the price target on Facebook (NASDAQ: FB) from $35.00 to $48.00.

Wieser said the revised forecast for 2013 relies heavily on advertising growth of “51% (vs. 43% previously) and 36% in 2014 (vs. 27% previously).” In addition to large brand, online, and mobile ads, “small business spending on Facebook may be a significant source of the company's recent revenue gains.” Promoted Posts, a combination of a post and advertisement, has added to this increase with a 200,000 increase of small businesses paying for the product in less than three months (October 2012-January 2013). There is further potential of small business ads gains. Weiser remains consistent with his increased price target despite a rather pessimistic view on mobile and video advertising. He notes that much of the video advertisements “will not capture meaningful budgets that would have gone to traditional TV […] and that this pool of money is still relatively small.” Further, Facebook has made gains in mobile advertising but their allocation of their budget for mobile ads are “not very dependent on the platform”. Facebook closed at $41.78 on Wednesday, September 4th.

Latest Ratings for FB

Jan 2020MaintainsOutperform
Jan 2020MaintainsOverweight
Jan 2020MaintainsBuy

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