Facebook Inc (FB) Upgraded To A Buy By Pivotal, PT Raised

Facebook Inc (NASDAQ:FB) stock has been upgraded to Buy from Hold by the Pivotal Research Group analyst Brian Wieser, in a report on April 10, 2014. The new rating reflects the revision in the cost of capital along with the “only-partially warranted sell-off” for the stock following the WhatsApp and Oculus acquisition announcements.

Facebook Inc (FB) Upgraded To A Buy By Pivotal, PT Raised

Q1 earnings may push Facebook stock higher

Analyst Brian Wieser stated that the Facebook Inc (NASDAQ:FB) stock has remained upbeat in the last few trading session, but it could go further from here after the company announces its first quarter 2014 earnings. Consensus estimates for the current quarter are similar to that of Wieser’s, but the estimates for “later in the year” appear under-stated.

According to the analyst, in the first quarter of 2014, Facebook’s efforts to search for the new streams of revenue by monetizing its inventory is a must watch item. Recent announcement indicates that Facebook would remain in the growth zone for some more time even at the current size of the company, believe analyst.

More for advertisers

Advertisers, existing as well as the new ones would benefit from the growth of Facebook Inc (NASDAQ:FB) to a great extent, and the efforts made by the social networker will payoff the company at this time irrespective of the consumer trends at present.

Instagram will capitalize on its offerings and will generate some real revenue. Also, Facebook Inc (NASDAQ:FB) is concentrating on small businesses as recently Ad Age “reported on Facebook’s SMB council, which mirrors client councils the company has established for larger brands.” There have been reports that the social networker is coming up with new units, which analyst believe should make the inventory more attractive, as well.

Facebook Inc (NASDAQ:FB) should see a rise in its marketer segment, which will draw more money upon the company this year. Also, advertisers and agencies had some complaints against Facebook similar to what has been already heard for network television advertising. These complaints and issues, according to analyst, reflect the importance of Facebook as a platform for these companies just like the big brands are dependent on the Television for their ads.

Analyst expects ad revenue growth of over 50% each quarter this year up to the fourth quarter. New price target for Facebook Inc (NASDAQ:FB) is $72, an increase from $66 previously.

About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com