SunTrust Robinson Humphrey Reiterates Buy on Facebook (FB) Following New Data

SunTrust Robinson Humphrey reiterated a Buy rating and $125.00 price target on Facebook (NASDAQ: FB) following new data from a Kenshoo report on Mobile App Advertising Trends. The data focuses on Gaming as well as Consumer apps across Android and iOS. The mobile app ad market is projected by Business Insider to reach $5.4B in 2016 up 18% from 2015.

Analyst Robert Peck commented, "New data from a Kenshoo report on Mobile App Advertising Trends is supportive of our bullish stance on Facebook’s monetization potential for core News Feed as well as Instagram. Ad Spending increased over 150% and installs were up nearly 200% driven by stable CTRs and better conversions - resulting in LOWER CPIs and higher ROIs. While price inflation hasn't occurred yet, we think the strong ROIs combined with improving targeting and analytics capabilities and app developers driving higher Life Time Value (LTV) should provide further “pricing power” (or uplift) for Facebook and Instagram. We believe Facebook has several levers to drive growth in the future including pricing power on core products, ad product innovation (video, DPAs), new revenue streams (search, commerce etc.) and unmonetized products Messenger and WhatsApp. We reiterate our Buy rating and $125 target implying 17x EV/EBITDA and 30x PE or 0.5x EV/EBITDA/growth and <1x PEG."

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 $107.51 yesterday.

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