What to Expect From Facebook in 2018

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With 2017 in the books and 2018 off to a promising start, investors should be taking this time to think about what to expect ahead. After all, this raging bull market is now nearing nine years old, and it has been the strongest bull market that most investors have ever seen. The Dow Jones Industrial Average (DJIA) rose 25% and the S&P 500 rose by almost 19.5% in 2017. Looking ahead to this year, the markets stand to run even higher.

24/7 Wall St. just came out with its annualized forecasting bias for the stock market in 2018. It looks like DJIA at 26,400 and at least 2,855 on the S&P 500 are now the baseline targets for this year.

It’s also worth pointing out that on the heels of tax reform, Credit Suisse is now targeting 3,000 and Oppenheimer is targeting 2,900 for the S&P 500 in 2018. At the end of 2017, the forward valuation for the S&P 500 Index was 18.5 times to 19.0 times expected earnings per share.

Currently Facebook Inc. (NASDAQ: FB) stock trades with a 28.4 forward price-to-earnings (P/E) multiple against 2018 expected earnings. This is expensive compared to the markets in general, but with the run that it saw in 2017 and the outlook for 2018, this multiple is well deserved.

Analysts are calling for Facebook to return about 19% to investors in 2018. This might not seem like much compared to 2017, but analysts are constantly re-evaluating their positions and the number is expected to push higher from here.

In fact, a smattering of analysts that have already weighed in on Facebook’s outlook in 2018, and so far it’s very solid.

Aside from its main platform, Facebook has Instagram, which is wildly popular as a photo sharing service. Instagram has even been moving in on Snap and its platform, securing more users. Facebook is expected to keep expanding into 2018, with its user base already over 2 billion and counting.

Look for Facebook to report its most recent quarterly results at the end of January. Thomson Reuters is calling for $1.94 in per-share earnings and $12.51 billion in revenue. The same period of last year reportedly had $1.41 per share and $8.81 billion.

Facebook has a 52-week trading range of $123.04 to $188.90 and a market cap of $547 billion. Its rank is roughly fifth out of the S&P 500.