Raymond James Upgrades Facebook (FB) to Strong Buy on Positive Checks, Attractive Risk/Reward
Get Alerts FB Hot Sheet
Rating Summary:
46 Buy, 17 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 11 | New: 43
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(Updated - January 13, 2017 7:41 AM EST)
Raymond James upgraded Facebook (NASDAQ: FB) from Outperform to Strong Buy with a price target of $160.00.
Analyst Aaron Kessler comments "We upgrade shares of Facebook to Strong Buy (from Outperform) given: 1) 4Q checks are positive and show continued momentum in 4Q; 2) we believe FB can continue to report upside to consensus estimates in 2017 despite some debate around ad load growth and expense growth; 3) we believe risk/reward is attractive with shares trading at ~24x/19x our 2016/2017 non-GAAP EPS (vs. expected 25% EPS CAGR). We maintain our $160 PT (30x 2017 non-GAAP EPS)."
Kessler further clarifies on expense guidance, saying "We believe Street estimates, which call for ~41% operating expense growth, are reasonable and would note over the last three years, FB non-GAAP operating expense growth has come in ~7.5%, 9%, and 8.5% below original guidance (at midpoint). We have increased our expense growth modestly for 2017 though are still below consensus (34% vs. 41%)."
Lastly, Kessler says that based on proprietary checks he remains comfortable with Q4 ad revenue estimates $8.2B/$8.3B or 45%/47% year-over-year growth.
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 $126.62 yesterday.
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