May Be More Room to Run for Facebook Share, Pivotal Analyst Says

On Thursday, Pivotal Research upgraded shares of Facebook FB from Hold to Buy and raised the price target from $66 to $72. Analyst Brian Wieser feels there is “more room for the stock to run ahead and probably after the company's 1Q14 earnings.” Consensus estimates in the back end of the year are “probably under-stated,” according to the analyst. Wiesler believes analysts will focus “on how Facebook has continually demonstrated a strong capacity to look for new ways to monetize its inventory” going into the first quarter report. According to Wiesler, Instagram “is now beginning to monetize its offering and will see real money this year (likely incremental to what Facebook might have otherwise seen without it).” “Core big brand segment of marketers should generally continue to expand their budgets with Facebook this year,” said the analyst. Wiesler expects ad revenue growth to “exceed 50% each quarter this year until the fourth quarter (with advertising growth of 65% during 1Q14 specifically.” Shares of Facebook are up one percent to $62.41 in Thursday's pre-market trading.