What to look for in Face­book earn­ings

Financial Mirror (Cyprus) - - FRONT PAGE - By Chris Lange

Face­book Inc. (NASDAQ: FB) is sched­uled to re­lease its most re­cent quar­terly re­sults af­ter the mar­kets close on Wednesday. Af­ter see­ing the stock’s in­cred­i­ble rally in 2017, it doesn’t seem like any­thing can stop Face­book, and it looks like an­a­lysts agree.

This stock has vastly out­per­formed the broad mar­kets, with its stock up about 56% year to date, mak­ing it the sec­ond best-per­form­ing FANG stock, right be­hind Net­flix. Over the past 52 weeks, the stock is up only 37%.

In terms of third-quar­ter earn­ings, Thomson Reuters has con­sen­sus es­ti­mates of $1.28 in earn­ings per share (EPS) and $9.84 bil­lion in rev­enue. The same pe­riod of last year re­port­edly had EPS of $1.09 and $7.01 bil­lion in rev­enue.

Credit Suisse re­cently re­it­er­ated an Out­per­form rat­ing for Face­book and raised its tar­get price to $235 from $190. Credit Suisse thinks much of the “con­tro­ver­sies news” is be­hind it, and the firm re­cal­i­brated its own prod­uct-byprod­uct model for the higher es­ti­mates.

The firm be­lieves that Face­book will be able to drive long-term rev­enue growth with­out a ma­te­rial lift in ad loads. Also noted as driv­ers were In­sta­gram, Pre­mium Video, DPA and up­side to the mon­e­ti­za­tion po­ten­tial of up­com­ing new prod­ucts like Graph Search.

For the third quar­ter, Credit Suisse in­creases its mo­bile news feed es­ti­mates from $5.8 bil­lion to $6.2 bil­lion and raised its fourth quar­ter es­ti­mate from $7.3 bil­lion to $7.4 bil­lion.

The firm’s re­port said: “Con­tro­ver­sies around Face­book shares that ex­isted end-of-2016 and in the first half of 2017 on ad load growth de­cel­er­a­tion now seem well be­hind us with two con­sec­u­tive quar­ters of ad price ac­cel­er­a­tion to off­set. It is the ris­ing ad­ver­tiser propen­sity to spend a greater por­tion of bud­gets on more tar­geted buys at ef­fec­tive CPMs more than dou­ble that of the un­tar­geted buy.”

Here’s what a few other an­a­lysts are say­ing about Face­book ahead of this re­port: - Wed­bush has a Buy rat­ing with a $225 price tar­get. - Mon­ness Crespi & Hardt has a Buy rat­ing and a $210 tar­get. - Piper Jaffray has a Buy rat­ing. - Wells Fargo has a Buy rat­ing with a $215 price tar­get. - Need­ham has a Buy rat­ing and a $185 price tar­get. - KeyCorp has a Buy rat­ing with a $200 price tar­get. - Mor­gan Stan­ley has an Over­weight rat­ing with a $195 price tar­get.

Shares of Face­book were last seen at $179.52, with a con­sen­sus an­a­lyst price tar­get of $196.53 and a 52-week range of $113.55 to $180.80. (24/7 Wall St.com)

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.