Digital Ad Spend Could Eclipse TV By 2017, Cowen Says; Facebook (FB), LinkedIn (LNKD) PTs Raised

Cowen analyst John Blackledge conducted its annual ad buyer survey and as a results increased their U.S. digital ad forecas and highlighted Facebook (NASDAQ: FB) and LinkedIn (NYSE: LNKD) as their Top 2015 Internet Picks. The firm also raised their price target on Facebook to $91 (from $86) and LinkedIn to $260 (from $253).

"We conducted a survey of 55 US senior ad buyers in 12/14 that indicated modest US ad growth; however, Digital spend is on-track to eclipse TV within 3 years," Blackledge commented, "Within Digital, Video and Social are the high growth segments. Mobile ad share is rising rapidly and Programmatic is emergent - even in TV."

In social networking advertising, the analyst notes Facebook dominates again this year. "FB scored a 7.9 (out of 10) ranking, 41% ahead of the peer average and 22% ahead of TWTR, its next closest peer in a social network ad capability ranking. FB was dominant in the key areas for advertisers, Targeting, Scale, and Analytics. We asked respondents which social network they intend to use in 2015 (but did not use before) and Instagram drew the most pent up ad demand (30% of all respondents), followed by Snapchat (19%) and Pinterest (17%)."

On their Top Picks - Facbook and LinkedIn - the analyst said: "FB is best positioned to benefit from the key growth segments we identified in this report: Social, Video, and Mobile. We see FB’s scale and targeting capabilities as core advantages and driving WW Digital ad share to rise from 8% to 17% '14-'19, yielding revenue CAGR of 28% '14-'19. We raise our price target to $91 (vs. $86 prior). For LNKD, our positive stance is primarily based on future growth associated with Sales Navigator. In addition, user engagement accelerated in 3Q14, as PV per UV +10% y/y (vs. +6% y/y in 2Q14), a positive for the Marketing Solutions. We raise our target price to $260 (vs. $253 prior)."

For an analyst ratings summary and ratings history on Facebook click here. For more ratings news on Facebook click here.

Shares of Facebook closed at $77.74 yesterday.

You May Also Be Interested In

• QuantumScape (QS) PT Lowered to $6 at Truist Securities
• Uber Inc. (UBER) PT Raised to $96 at Tigress Financial Partners
• TD Cowen Reiterates Buy Rating on ServiceNow (NOW)