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Facebook Has 'Clearest' Path To Growth, Nomura's DiClemente Says

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Nomura analyst Anthony DiClemente feels that Facebook Inc (NASDAQ: FB) has a healthy runway of future revenue growth, with multiple legs of upside.

This year, revenue growth is likely to be driven by core ad products (including video ads) and Instagram monetization. But, Facebook could benefit from the potential expansion of Facebook Audience Network (FAN) and Messenger monetization (potentially in second quarter of 2016).

"Our 2016 revenue estimate is now roughly -$300mn above consensus, as we believe Facebook maintains the clearest revenue growth path within Internet; as such, we are raising our Target Price to $135, up from $125," DiClemente wrote in a note to clients.

Instagram and mobile are offsetting declines in the company's legacy platform. In the fourth quarter, Facebook outperformed key user metrics such as MAUs, Mobile MAUs and DAUs, as it deftly maneuvered around changing consumer tastes within mobile, while driving increasing engagement in video and its Instagram platform.

The analyst has a Buy rating on FB stock, which was down about 1 percent at $109.09. They have gained 4 percent this year.

Latest Ratings for FB

Mar 2017BarclaysInitiates Coverage OnOverweight
Mar 2017BTIG ResearchUpgradesNeutralBuy
Feb 2017Pivotal ResearchDowngradesBuyHold

View More Analyst Ratings for FB
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