Analysts Are Seriously Back to Liking Facebook After Earnings

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Facebook Inc. (NASDAQ: FB) managed to have a solid earnings report during the week of February 1, 2019. The solid gain in the shares should work to temper at least some of the negative issues when evaluating the actual pressure being applied to its business. The social media leader’s share price had traded up 4.3% to $150.42 ahead of earnings, but Facebook posted double-digit percentage gains afterward.

It reported $2.38 in earnings per share (EPS) and $16.9 billion in revenue for the fourth quarter. The Thomson Reuters consensus estimates had called for EPS of $2.19 and $16.4 billion in revenue. The same period of last year reportedly had $1.44 in EPS and $12.97 billion in revenue.

Facebook’s daily active users totaled 1.52 billion on average for the quarter ending in December 2018, an increase of 9% year over year. Its monthly active users totaled 2.32 billion, an increase of 9%. Mobile advertising revenue represented roughly 93% of advertising revenue, up from 89% in the fourth quarter of 2017.

247/ Wall St. tracked multiple analyst calls after Facebook’s report. Most of these calls included increased targets, but at least a few maintained some caution.

  • Barclays maintained an Overweight rating and a $210 price target.
  • Canaccord Genuity reiterated its Buy rating and raised its target to $200 from $180.
  • Cowen reiterated its Outperform rating and raised its price target to $195 from $184.
  • Credit Suisse reiterated its Outperform rating and raised its target from $208 to $210.
  • Deutsche Bank reiterated its Buy rating and raised its target to $200 from $195.
  • Jefferies reiterated its Buy rating and raised its target to $200 from $180.
  • JPMorgan reiterated an Overweight rating and a $210 price target.
  • Mizuho maintained a Buy rating with a $210 price target.
  • Morgan Stanley reiterated an Overweight rating and raised its target from $175 to $190.
  • Oppenheimer has an Outperform rating and raised its price target to $195 from $185.
  • Piper Jaffray reiterated an Overweight rating and raised its target to $195 from $190.
  • Raymond James reiterated its Outperform rating and raised its target from $180 to $200.
  • RBC Capital Markets reiterated its Positive rating with a $200 price target.
  • SunTrust maintained a Buy rating with a $210 price target.

Note that when Wedbush Securities maintained its Outperform rating but lowered its price target to $200 from $220, the firm cited the earnings beat and that Facebook continues to get likes from users and advertisers alike.

Other calls with cautious ratings:

  • Nomura/Instinet kept its Neutral rating but raised its target to $172 from $148.
  • Pivotal Research has been cautious and raised price target to $120 from $113.
  • Stifel maintained a Hold rating and raised its target price to $155 from $150.

Shares of Facebook rose by more than 10% to close at $166.69 on Thursday, in a 52-week range of $123.02 to $218.62 and with a prior consensus price target of $184.67. Facebook shares traded up fractionally at $166.90 late on Friday.

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