Raymond James has downgraded Facebook Inc (NASDAQ:FB) stock to Strong Buy from Outperform as the company’s shares continue to surge forward. The Raymond James analyst put a price target of $56 on the company’s shares and downgraded the company because of the massive growth in its value in recent weeks and months.


According to Aaron Kessler, the analysts who authored this report, Facebook Inc. (NASDAQ:FB) is fairly valued at a $56 price target for the next twelve months. The 10% upside from the company’s current share price to the price target means that Outperform is too positive a rating to put on the company. On today’s market shares in Facebook Inc (NASDAQ:FB) had fallen by around 1% at time of writing.

Facebook downgrade

The downgrade to Strong Buy does not mean anything has changed at Facebook Inc (NASDAQ:FB). It simply indicates that the market has begun to price the company at a level that Kessler deems more adequate. Facebook is still looking like a driver of growth according to the report, but nothing has made the analyst want to increase the Price Target on the company.

The checks done by Kessler indicate strong trends in the third quarter. Facebook Inc (NASDAQ:FB) will release its earnings report for the three months ended September 30 on October 30. Kessler estimates that Facebook Inc (NASDAQ:FB) will show earnings of on revenue of $1,942 million in the report. He’s looking for earnings of 97 cents per share from the company for the fully year 2013.

Facebook on the rise

Today’s Raymond James report raised the firm’s price target on Facebook Inc (NASDAQ:FB) from $38 per share to $56. The social networking company has massively increased its capital with analysts in recent months after it showed strong trends in mobile monetization in the second quarter of this year. Most analysts see this trend continuing.

The upper bar for revenue per user has been set by Google Inc (NASDAQ:GOOG). In 2012 the search company earned close to $35 per user. Facebook Inc (NASDAQ:FB) managed to bring in just $3.7 per user. That means that the social network has a lot of room to grow, and investors are positive on the firm’s ability to do so.

Facebook Inc (NASDAQ:FB) shares have risen by around 90% since the first day of trading in 2013, though the company’s shares have met resistance at $50 per share. The next big movement could come when earnings are released on October 30.