Credit Suisse Lifts Its Facebook Price Target To $170 As Q3 Report Nears

The Swiss bank upped Facebook's price target to $170 from $154.

Credit Suisse is expecting a 26 percent EPS CAGR over the next five years and feels investors have overcome concerns of tough comparisons coming up in Q4.

"Additionally, we believe Facebook is taking steps to introduce a new prospecting product to help advertisers find new customers as well as to monetize Messenger in early-2017," the analysts stated in a research note to clients.

Related Link: How The Launch Of Facebook Workplace Will Impact Jive Software

Facebook is attempting to roll out a business workplace messaging feature to take on rivals Slack and Atlassian Corporation PLC TEAM. Slack is said to be worth nearly $4 billion.

Credit Suisse feels the Street is undervaluing Instagram's potential in the near term, as well as Facebook's potential to monetize its messaging and WhatsApp platforms.

Credit Suisse's Investment Thesis On Facebook

• Facebook will be able to drive long term revenue growth without a material lift in ad loads — near-term drivers include Instagram, premium video and dynamic product ads.
• Wall Street models continue to underestimate the long-term monetization potential of upcoming new products.
• Optionality and upward bias to estimates, which do not contemplate contributions from multiple other products including WhatsApp, Messenger and Local.

Credit Suisse maintains an Outperform rating on Facebook.

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