UPDATE: Pivotal Research Group Downgrades Facebook to Hold, Raises PT on News of WhatsApp Deal

In a report published Thursday, Pivotal Research Group analyst Brian Wieser downgraded the rating on Facebook FB from Buy to Hold, but raised the price target from $65.00 to $66.00. In the report, Pivotal Research Group noted, “Facebook is buying WhatsApp for $19bn. While we see strategic merit, the acquisition is difficult to justify on metrics we use to value Facebook. A separate re-assessment of ad revenues for the core business was leading us to raise expectations, but dilution due to WhatsApp partially offsets these changes. Our new target for Facebook is $66 which equates to a Hold rather than our prior Buy recommendation. Facebook has had a solid run this year. Supporting our more cautious view, concerns over costs of future acquisitions may weigh over the company in the near-term.” Facebook closed on Wednesday at $68.06.