Facebook (FB) PT Lifted to $120 at Macquarie Following Another Solid Quarter
Macquarie analyst Ben Schachter reiterated an Outperform rating and raised his price target on Facebook (NASDAQ: FB) to $120.00 (from $106.00) following strong results after the close.
Schachter commented, "FB posted another very strong quarter, highlighted by the second quarter in a row of accelerating FX adj. rev growth (up 57%) and 4Q opex guidance at low end of expectations. Engagement metrics, once again, hit new highs and results were solid across all geo’s. With the core business in great shape, the company remains focused on many long term opportunities, including: messaging, video, search, virtual reality, Internet connectivity, its ad network, and more. As we have said previously, in our view, what is most exciting is that many of these businesses have the potential to be as large or larger than FB’s current advertising business. Notably, mgmt also stated that the three key monetization drivers: advertiser demand, user engagement, and ad load will all continue to be positive drivers going forward."
The firm's 2016 non-GAAP EPS rises $0.09 to $2.81.
Key positives:
1) FX adj ad rev. growth of 57% (up 150bps q/q)
2) Opex guidance of 50% for FY ’15 (from 50%-55%)
3) Engagement at all-time high
4) Mobile and desktop both better than expected
5) Key monetization drivers will continue to improve
6) Video ramping fast – 500mm users daily
7) Well positioned for large long-term opportunities
Key concerns:
1) No ’16 opex guidance until 4Q results
2) Oculus shipments may be smaller than we expected (though investors may view that positively given its likely negative margin impact)
3) Uncertainty around timing, scale, and investment for LT businesses
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.