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Facebook Shouldn't Be Scared Of Snapchat; Bank Of America Adds Stock To 'US 1' List

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Facebook Shouldn't Be Scared Of Snapchat; Bank Of America Adds Stock To 'US 1' List

Shares of Facebook Inc (NASDAQ: FB) are trading within striking distance of its all-time highs and already higher by nearly 15 percent in 2017.

Facebook's stock is also higher by nearly 250 percent since its initial public offering, as the social media platform solidified its dominance and proved it can stand above the competition including Twitter Inc (NYSE: TWTR).

However, Twitter's woes were well publicized but the upcoming initial public offering of Snapchat's parent company, Snap Inc, has Facebook's investors asking: how well positioned is Facebook to counter the new competitive threat?

Analysts at Bank of America aren't concerned. In fact, the analysts argued in a report on Wednesday that Snap's recently released user metrics implies "less competitive pressure than expected."

Moreover, Facebook's expense guidance has been communicated to investors and reflected in consensus estimates. Facebook's expected ad load growth slowdown in the bottom half of 2017 is also "well understood" by investors, but the fact remains ad loads will still grow but at a much slower pace.

Given the greater clarity for Facebook's upcoming year and the reduced threat from Snap, the analysts added Facebook to their "US 1" list.

Other analysts haven't shied away from expressing a less than optimistic sentiment surrounding Snap's IPO.

For example, Trip Chowdhry of Global Equities Research believes Snap's IPO isn't even worth $500 million and comes at a time when the social media boom is coming to an end.

Latest Ratings for FB

DateFirmActionFromTo
Feb 2020Pivotal ResearchDowngradesHoldSell
Jan 2020OppenheimerMaintainsOutperform
Jan 2020B of A SecuritiesReiteratesBuy

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Bank of America SNAP SnapChatAnalyst Color Analyst Ratings Tech Best of Benzinga

 

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