Facebook (FB):Raising PT But Snapchat Migration Could Represent Competition - Jefferies

Jefferies analyst, Brian Pitz, reiterated his Buy rating on shares of Facebook (NASDAQ: FB) after posting another huge beat driven by the soaring mobile ad business. Instagram is ramping quickly, and FB narrowed its expense outlook. But 2017 now looks more challenging given the very tough comps and new guidance around the stabilization of ad-loads in mid-2017. A larger question is whether Snapchat's rapid rise will impact Instagram's growth trajectory; this could occur as early as 4Q.

Report recap: Revenue growth accelerated for the fourth straight quarter growing 59% Y/Y to $6.4B, the ad business grew +63% Y/Y to $6.2B. Mobile ad rev grew +80% Y/Y to $5.2B and GAAP EPS grew +180% Y/Y to $0.71, highlighting the impressive operating leverage in this business. The beat was broad based with strong growth across all verticals, marketing segments, and geos.

The price target increases to $170 (from $160).

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 $123.34 yesterday.

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