Facebook Inc (NASDAQ:FB) received an upgrade from Citi analysts after they spoke with various agencies and advertisers. They said from those conversations, they believe that the factors which are driving the social network’s shares up so quickly and suddenly are sustainable.

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Shares of the company’s stock rose almost 4 percent in early afternoon trading.

More opportunities of growth for Facebook ahead

Analysts Mark May, Kevin Allen and Nathaniel Brogadir issued a report to investors this morning upgrading Facebook Inc (NASDAQ:FB) from Neutral to Buy. They also raised their price target from $32 a share to $55 a share.

They said when they first initiated coverage of Facebook, they were concerned about the rapid shift from desktop to mobile usage of the social network. In the short term, they believed this would create monetization challenges because desktop revenue was about 70 percent of the company’s revenue, and it was declining. However, after speaking with advertisers and various agencies, they believe that the current growth at the company is sustainable and that there are several other factors which could contribute even more growth.

Facebook advertisers provide feedback

The Citi analyst noted three key takeaways from their conversations with advertisers utilizing Facebook’s platform. They said several of those advertisers are seeing more than 15 percent sequential growth in spending. In addition, they note that a number of data points suggest that mobile app download growth has continued so far this quarter.

And third, they said Facebook Exchange ads continue to remain effective and that Facebook Inc (NASDAQ:FB) has had plenty of room to increase its fill rates since the end of the second quarter.

Potential catalysts for Facebook

The analysts said they see several areas which will likely provide Facebook with opportunities for growth in the future. Of course adding more inventory to Facebook Exchange, including mobile ads, provides an excellent opportunity for growth. The company is also planning to introduce video ads and roll out the larger format desktop newsfeed.

They believe Facebook Inc (NASDAQ:FB) could also launch and adopt keyword-based ad targeting similar to what Google Inc (NASDAQ:GOOG) does for search results. The social network could also further improve its ad platform, particularly in the areas of audience segmentation and campaign analytics. The company still has yet to introduce ads to Instagram as well, and when it does, this could become a key driver for growth at the company. Launching a third party ad platform could also provide an additional opportunity.

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