Facebook (FB) PT Lifted to $105 at Evercore ISI

Evercore ISI analyst Ken Sena raised estimates and his price target on Buy-rated Facebook (NASDAQ: FB) to $105.00 (from $95.00), saying the company's product and scale lead are evident.

Sena commented, "While the role of scale cannot be underemphasized, this report attempts to focus more on product. Moreover, while a Facebook / Twitter combined note may seem a bit disjointed in the context of a downgrade, the comparison is useful in thinking through how the landscape is changing and what opportunities and pitfalls lie ahead within content distribution."

He added, "FB now equals Google as the top traffic referral source to top publishers for video and article content, according to data provided to us by Parse.ly, a content analytics provider. In fact, we believe Facebook’s strength in referral is paving the way for greater content hosting in articles and video. For instance, FB now boasts four billion video streams per day, which is quadruple what users watched a year ago. However, in February 2014, only a quarter of all videos posted to Facebook were uploaded directly (vs. an external link), which compares to 70% today (according to analytics company Socialbakers). This change had much to do with the enhancements FB has made to its platform in terms of speed and other capabilities. In terms of the Parse.ly data, which tracks more than 300 global premium news/content sites, it shows Facebook as responsible for nearly a third of publisher traffic, placing it effectively on par with Google. We note that because YouTube hosts video, it does not show up meaningfully in referral traffic. Nevertheless, even with FB’s surging growth in hosted video content, we can see that its referral of traffic to major publishers continues to soar as well. Meanwhile, Twitter has hovered in the 3.5% range of referral traffic, down from the past few years, suggesting less captivity among publishers."

While they are leaving 2015 estimates largely unchanged, where they are essentially in-line with the Street, they are increasing 2016 revenue by 3% or $600mm to $23.1bn, now about 2% ahead of the Street. This flows through to 3% higher EBITDA of $14.9bn (65% of rev). For 2Q, their $3.97bn (36% y/y) estimate remains unchanged and is roughly in-line with the Street while their EBITDA estimate of $2.55bn (64% of rev) is unchanged and is about 3% ahead of the Street.

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 $82.44 yesterday.

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