Facebook (FB): Instagram On a Collision Course With Snapchat - SunTrust

August 8, 2016 7:47 AM EDT
Get Alerts FB Hot Sheet
Price: $127.87 --0%

Rating Summary:
    48 Buy, 9 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 9 | Down: 12 | New: 43
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SunTrust Robinson Humphrey analyst, Bob Peck, reiterated his Buy rating on shares of Facebook (NASDAQ: FB) noting that last week, Instagram rolled out its "Stories" feature, which is its entrance into ephemeral (i.e. disappearing) content. The experience is very similar to Snapchat, where users string together pictures and videos into one “story” that disappears in 24 hrs. Ironically, Snapchat recently expanded from ephemeral content to permanent content with “Memories” – it is quite obvious these two platforms remain on a collision course, which will be important for Facebook investors to monitor. These are the top 10 reasons Facebook is launching stories:

1. Grow beyond Facebook & Instagram’s “perfect moments” posts

2. Leverage Instagram’s discoverability and verified accounts

3. Enable users to create a “current identity” vs. “accumulation identify”

4. Make posting photos fun again (current fatigue)

5. Remove social pressure associated with likes or hearts

6. Increasing the creation of original content

7. Reaccelerate Instagram’s moderating US user growth

8. Increase time spent and engagement on Instagram

9. Expand experience, with minimal UI impact

10.Build functionality to become a social augmented reality platform (SARP)

No change to the price target of $142.00

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 $125.15 yesterday.

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