Facebook is one of only a handful of companies being rewarded for its strong fourth quarter results as its stock is soaring this morning. Shares climbed by more than 12% to reach as high as $105.75. If the stock keeps this up, we could see a new 52-week high as the current high is $110.65 a share, although currently it looks like the $105 range is serving as a ceiling for the stock.
Facebook price target raised by Goldman
Multiple firms upped their price targets for Facebook following last night’s results. The social network posted revenue of $5.84 billion, beating the consensus of $5.37 billion and, as Goldman Sachs analysts pointed out, hitting “the best upside to consensus in dollar terms since going public.” Non-GAAP earnings were 79 cents per share, beating the consensus by 11 cents, which the firm also said was the greatest upside the company has seen since the second quarter of 2014.
Goldman analyst Heather Bellini and team said in their report that they have increased their price target from $125 to $130 per share, putting them in line with quite a large part of Wall Street in terms of price target. They think the Instagram rollout, video ad adoption, and continue innovations in ad format are accelerating growth on the top line and see Instagram as being potentially the biggest contributor for growth this year.
Here’s a round up of hedge funds’ May returns
Tyro Absolute Return Fund was down 1.5% for May. The fund's main contributors in May were Super Micro Computer, which gained 1.6%, Shyft Group, which was up 1%, and GCI Liberty, which gained 1%. Detractors in May include Recro Pharma, which fell 2.6%, index shorts and hedges, which declined 2%, and DXC Technology, which was Read More
Further, they said the social network will likely be able to improve its share of digital ad dollars.
Other price target increases
Stifel analyst Scott Devitt and his team upped their price target for Facebook from $120 to $130 per share, highlighting that Instagram is poised for especially strong growth as 98 of the company’s top 100 advertisers also bought Instagram ads during the fourth quarter.
Raymond James analysts Aaron Kessler and Justin Patterson raised their target from $120 to $125 per share. They expect user growth across the social network’s platforms to continue showing strong growth, plus rising advertiser demand resulting in higher prices and increased monetization on the new platforms. They listed several positives in last night’s report but no negatives.
Baird analysts also raised their price target for Facebook from $116 to $120 per share, while Bernstein analysts set a Street-high target of $150 per share, up from $134. Interestingly, the firm also rates Facebook at Market-Perform.