Topeka Capital Markets today reiterated its ‘buy’ rating and upped its price target from $24 to $36 on Facebook Inc (NASDAQ:FB), after the social networking company announced the roll-out of its Gifts service. Gifts, released to a handful of users on a limited basis in September, allows users to buy and send real-world products, such as chocolate, coffee, and socks to friends connected on the social network.

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The Gifts service is now being expanded and will become available to all users in North America. The announcement has prompted some analysts to predict that the worst is over for Facebook’s IPO, which has come into strong difficulties and criticism since it went public earlier in the year, but has since rallied over the past week and reaching market values that it hadn’t seen since July.

Victor Anthony, analyst for Topeka Capital Markets, said:

“Some of the investors are thinking the worst is behind Facebook Inc (NASDAQ:FB) and now is maybe the time to go long on the stock.”

Anthony also laid out a number of reasons as to why Facebook Inc (NASDAQ:FB) will now see a rebound in the market – the primary reason being that Facebook has “cracked the mobile code” and has managed to monetize mobile advertising:

“Mobile advertising revenues are now a material percentage of FB’s advertising revenues, and should likely comprise half of Facebook Inc (NASDAQ:FB) ’s advertising revenues within the next two years. That growth is led by sponsored stories, which was at a $3mm per-day revenue run-rate in September, or $1bn annualized. Additionally, mobile ad units such as mobile app installs, sponsored offers, and video ad units, could drive mobile ad revenues to 20% of ad revenues in 4Q12, up from 14% in 3Q12.”

Topeka Capital Markets said: “This is a clear step towards what we think should be a formidable e-commerce platform that is, of course, socially based. This is also supportive of our thesis of significant unrealized monetization potential on the platform. E-commerce has proven to work well on mobile devices where, unlike advertising, there are zero monetization differences with desktop. An e-commerce platform could be worth a conservative $2 per share of incremental value to Facebook. E-Commerce and social search, combined, represents an incremental $9 per share of value to Facebook.”

Additionally, BTIG upgraded the stock from sell to neutral, and has lifted their price target from $16 to $24 a share.

They note that  their sell rating was driven by fear about the Facebook user experience from a cluttering of ads and multiple negative earnings reductions. However, Facebook has taken ad loads to all new levels in Q4, with no discernible impact on users/user experience. The increased ad load is driving substantially higher revenues and adjusted EBITDA in Q4 2012 and 2013.

Nonetheless, they ‘are not excited by Facebook Inc (NASDAQ:FB)’s valuation’, which stands about 15x adjusted 2014 EV/EBITDA based on their revised estimates. The analysts also continue to have longer-term fears about what the company is doing to the user experience.

Shares of Facebook are trading at $25.85 on the news, up 7.72%.