Facebook (FB) PT Raised to $110 at Sterne Agee CRT Amid Another Strong Quarter
Sterne Agee CRT analyst Arvind Bhatia reiterated a Buy rating and boosted his price target on Facebook (NASDAQ: FB) to $110.00 (from $92.00) following another strong quarter in terms of user growth, engagement and monetization.
Bhatia commented, "In fact, in absolute numbers, the 173M y/y increase in monthly active users in 2Q was the highest increase since 2013 and engagement (DAU/MAU) at 65% was a record high. In addition, Instagram, Messenger and WhatsApp communities continue to grow and present large future monetization opportunities. Management guided for slightly slower y/y ad revenue growth in 2H relative to 1H due to tougher comps and currency impact but we believe this is already reflected in most models. Expense growth guidance for the year was narrowed to +50 to +55% from +55 to +60%. Our new 12-month target of $110 (up from $92) assumes ~17x (up from 16x) our new CY17 EBITDA estimate."
The firm is adjusting FY15 revenue / adjusted EBITDA estimates to $16.7B / $10B from $16.4B / $9.5B. They are adjusting our FY16 revenue / adjusted EBITDA estimates to $21.6B / $13B from $20.27B / $11.8B.
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Shares of Facebook closed at $96.99 yesterday.