Facebook Inc (NASDAQ:FB) could do better than expected when it releases the results from its December quarter. That’s according to channel checks conducted by Raymond James analyst Aaron Kessler. As a result, he has bumped up his target price from $60 to $63 a share and maintains his Outperform rating on the stock.

Facebook tracking above estimates

According to Kessler’s channel checks, fourth quarter ad spending through Facebook Inc (NASDAQ:FB) was tracking over their estimates of an 18% increase quarter over quarter and a 59% increase year over year. He said they also found continued strength in mobile advertising and also pricing and traffic.

Raymond James hosted a call with a top strategic preferred marketing developer on Facebook. The firm suggested that ad spending on the social network may have risen 28% quarter over quarter. If this percentage is close to being accurate, then Facebook could post a nice surprise in its next report. Kessler notes that spending growth at the developer is likely going to be higher than the number Facebook reports, but he still thinks that this suggests Facebook will surprise.

Facebook sees strength in mobile app installs

The developer told Kessler that mobile app install ads saw the biggest demand on Facebook. Unpublished page post link ads were second, and then external URL ads on the right-hand side of the page were third. According to Kessler’s checks, Facebook Inc (NASDAQ:FB)’s new horizontal mobile news feed ads helped give the social network’s mobile growth a boost in the fourth quarter.

He also noted strong engagement trends, despite worries about this very issue. After examining data from comScore, he thinks engagement on Facebook is still strong. Through November, Facebook’s total minutes rose 29% year over year, compared to 30% in the third quarter. He said a 57% year over year increase in mobile minutes drove that increase in total minutes.

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