Market Overview

Facebook's Post-Earnings Run Mirrors Positive Voices From The Street

Facebook's Post-Earnings Run Mirrors Positive Voices From The Street

Facebook Inc (NASDAQ: FB) shares jumped more than 5 percent on Thursday after the company’s second-quarter earnings report blew expectations out of the water.

A number of Wall Street analyst weighed in on Facebook following the report. Here’s a rundown of what they had to say.

Voices From The Street

Citi analyst Mark May said Facebook is on the path to 30 percent EPS growth In 2018. “While mgmt continues to temper expectations, the underlying trends remain strong and we see multiple levers of new growth and upside,” May wrote.

Credit Suisse analyst Stephen Ju said Facebook is well-positioned to continue to drive revenue growth without having to perpetually increase ad loads. "From a medium-term product point of view, the rising profit pool from mobile/newsfeed affords FB more room to invest aggressively into its video initiative (both infrastructure and content),” Ju wrote.

Stifel analyst Scott Devitt said Facebook’s 50 percent ad revenue growth was even more impressive given the difficult comparison from a year ago. “Although all signs point to a moderate deceleration in revenue growth in the second half of 2017, Facebook’s ramping contributions from video / Instagram should keep growth at healthy levels through the end of the year,” Devitt wrote.

Baird analyst Colin Sebastian said artificial intelligence and machine learning will be the key long-term drivers for Facebook. “While margins could remain under pressure through 2017 and beyond as Facebook continues to spend on key strategic initiatives (video content, community initiatives, data center infrastructure), we remain optimistic regarding significant long-term growth opportunities and market share gains likely to emerge from these significant investments,” Sebastian wrote.

BMO Capital Markets analyst Daniel Salmon said Facebook’s established relationship with its advertisers will be key as it transitions away from its core News Feed model and toward monetizing Messenger. “We expect the near-term driver to remain the shift to video and thus the expected launch of exclusive premium content later this year (and users' engagement with it) remains our near-term focus,” Salmon wrote.

Related Link: Wall Street Weighs In On AMD's Strong Q2 And What Lies Ahead

Ratings And Price Targets

Wall Street is mostly bullish on Facebook’s stock following the blowout quarter, but some firms are more bullish than others:

  • Citi has a Buy rating and $200 price target.
  • Credit Suisse has an outperform rating and $190 price target.
  • Stifel has a Buy rating and $200 price target.
  • Baird has an Outperform rating and $185 price target.
  • BMO Capital Markets has a Market Perform rating and $170 price target.

Latest Ratings for FB

Oct 2020Truist SecuritiesMaintainsBuy
Oct 2020Wells FargoMaintainsOverweight
Oct 2020MizuhoMaintainsBuy

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