Facebook (FB) Gains as JPMorgan Notes 'Impressive' April Engagement; Remains Favorite Idea

Facebook (NASDAQ: FB) is stronger off the open (+1.8%) following positive comments from JPMorgan analyst Doug Anmuth. The analyst reiterated an Overweight rating and $100 price target, noting share of mobile remained strong at 24% in April.

"Facebook remains our top pick in 2015 as we believe it’s still early in monetizing Facebook's base of 1.4B users and the company is building other strong franchises in Instagram, Messenger, & WhatsApp. comScore data suggests continued strong engagement as Facebook’s share of mobile Internet time excluding Instagram & WhatsApp in April was 24%, and its share of total U.S. Internet time, including desktop, was 19%," Anmuth said.

Facebook remains the firm's favorite idea.

The analyst noted 'impressive' April engagement data. "Facebook saw strong engagement as its share of mobile minutes (smartphones only, excludes tablets) was 24% in April, meaningfully higher than its 22% share in March and well above other social services combined (Facebook-owned Instagram & WhatsApp, along with Twitter & Snapchat), which remained steady M/M at ~5%. Facebook's share of total Internet minutes in the U.S. across both mobile & desktop was also up, eaching 19% from 18% in March, and is ~6x the time spent on the competitive services noted above, which are at ~3.3%. If we included Instagram and WhatsApp with Facebook, total Facebook Inc. minutes grew ~42% Y/Y in April, accelerating significantly from the 35% Y/Y growth in March, driven by strong growth on WhatsApp (+211% Y/Y) and core Facebook mobile (+75% Y/Y). Facebook’s share of desktop minutes has declined from 14% in April 2014 to 11% in April 2015 and is flat M/M."

Further, the analyst noted recent product updates target greater engagement. "Facebook recently introduced video calling in Messenger. Users can initiate a video call with one tap of the video icon, and the service can be used between different device types (i.e. iOS to Android and vice versa). Video calling is currently available in 18 countries, including the US, UK, France, Canada, Mexico, and Portugal, and FB continues to expand the service geographically. FB is also launching Instant Articles to enhance the reading experience on News Feed. News and stories via Instant Articles load as much as ten times faster than standard mobile web articles. The platform also offers tilt-to-pan photos, auto-play videos, embedded audio captions, and maps to support more in-depth engagement directly on FB. Currently, nine publishers including The New York Times, National Geographic, BuzzFeed, NBC, The Atlantic, The Guardian, BBC News, Spiegel and Bild have partnered with FB on Instant Articles. We also note that WhatsApp continues to show solid engagement gains as it passed 800M MAUs in mid-April. Our anecdotal checks and discussions with agencies and marketers also suggest that auto-play video began to ramp more materially in late 1Q and into 2Q."

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 $78.44 yesterday.

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