Facebook (FB) Lifted to $125 at JPMorgan; Accelerating Ad Revenue the Highlight

JPMorgan analyst Doug Anmuth reiterated an Overweight rating and lifted his price target on Facebook (NASDAQ: FB) to $125.00 (from $118.00) following strong Q3 results highlighted by accelerating ad revenue growth.

Anmuth commented, "FB delivered another strong qtr w/accelerating growth in both FXN ad revenue to 57% Y/Y & total MAUs to 14% at 1.545B. Non-GAAP op margins of 53.5% were 30bps above us & consensus, delivering profitability upside of ~3%. As expected, FB took its full year 2015 non-GAAP opex growth outlook to 50%, the bottom of the initial range. The company did not quantify the opex outlook for
’16—that will be provided at 4Q earnings—but it also did not qualitatively talk up the spend beyond saying it will continue to invest heavily. Margins & the overall level of investment spend for FB in ’16 will continue to be a primary topic over the next few months, in our view—we continue to think guidance of 40-60% non-cash opex growth is most likely—but we believe focus will be on the seasonally stronger 4Q
where FB is well positioned w/rapidly growing drivers in mobile, video, & Instagram, along w/easier comps. We would expect top & bottom line estimates for future periods to increase. Our 2016 and 2017 revenue/EPS estimates increase roughly 3% and 7%, respectively, and we expect shares to move higher in the N-T. We reiterate our OW rating and raise our PT to $125."

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 $103.94 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• Summit Insights Downgrades Silicon Labs (SLAB) to Hold, 'expect its stock to be an inline performer'
• Goldman Sachs Upgrades Bank Central Asia Tbk (BBCA:IJ) (PBCRY) to Buy