Citibank has raised its price target on Facebook shares from $148 to $158
Over the past few years, Snapchat has grown significantly popular in the mobile social media space. This has caused a certain number of investors and analysts to express concern that Facebook Inc. (NASDAQ:FB) could perhaps take a hit from this growing competitive threat.
Equity research firm Citibank, however, begs to differ. The firm disregarded such concerns describing them as “Overblown” recently. In fact, it even raised its price target on the stock from $148 to $158, reflecting 22.81% upside potential over the last close.
The analyst at the firm highlighted that Facebook holds significant influence in today’s advertising market. He noted that despite this, Facebook is still in a growth phase. The firm noted that some investors have overestimated the competitive threat Snapchat poses to Facebook at this point. The firm on the basis of its review and analysis of third-party numbers from the company, noted that Facebook’s user engagement is showing growth and does not indicate any negative impact from Snapchat’s growth.
The analysts are of the opinion that the consensus estimates for Facebook are conservative. Additionally, the firm described Facebook’s earnings result as “strong,” which surpassed the Street’s estimates. These results were attributed to Facebook’s advertisement and pricing strategy by the firm.
Earlier this month, research firm Morgan Stanley raised its price target on Facebook stock from $150 to $160 while keeping an Overweight rating. Morgan Stanley projects that Facebook can see revenue and EPS upside relative to the Street’s estimates of 6% and 10%, respectively. The firm noted that Facebook stock has traded below its median multiple due to certain concerns regarding slight revenue deceleration. As such, the firm believes that at current levels Facebook’s stock presents a lucrative buying opportunity to investors. “Even this deceleration could prove overly conservative given the potential for other platforms with lower ad load levels – Instagram, Messenger, and FAN – to start contributing more,” read the firm’s research note.