UPDATE: Citigroup Raises Price Target for Facebook; View as 'Best Growth Story in the Internet Sector'

by Eric Niederer, Benzinga Staff Writer
March 11, 2014 2:27 PM | 1 min read | Make a Comment
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In a note released Tuesday Citigroup analyst Mark May reiterated the firm's Buy rating on Facebook
FB
and raised the price target from $70 to $85 In raising the price target May looked to three key points:
  1. the WhatsApp acquisition
  2. ads on Instagram
    3. video ads on Facebook Looking to 2014, May outlined four themes he believes will continue to drive growth:
  3. continued RPM (revenue per thousand ad impressions, or monetization) gains due to the mix shift toward higher valued News Feed ads and from increases in like-for-like ads from improved targeting & analytics.
  4. continued growth in mobile app adds as installs remain in high demand and adoption of app engagement ads.
  5. monetization of Instagram (e.g., see recent $100mn contract with Omnicom).
    6. wider rollout of video ads on Facebook and Instagram, which we believe could have 2x-plus eCPMs than standard ads. At last check Facebook was trading down 1 percent at $71.31
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