Facebook bulls cut price targets

Facebook Inc’s newest strategy to lead with Instagram and video as the company’s next catalysts of growth has investors buying in, at least for now. Following a mixed third-quarter earnings report, shares of the social network are climbing the most in six months, up 6 per cent in trading yesterday.

While Wall Street has sounded off on its confidence in the tech giant’s ability to scale, reductions to price targets from Facebook’s biggest bulls reveal some level of concern as Chief Executive Officer Mark Zuckerberg begins to pivot away from a feed-centric platform. At least four analysts have slashed their price targets by $30 (Dh110) or more.

Mark Mahaney of RBC Capital said, Facebook has ‘arguably the best risk-reward in large cap Internet, in our view,’ in a note to clients. The firm remains bullish given that Facebook still owns two of the largest media and messaging assets in the world. Monetisation of core Facebook and Instagram assets still have material upside potential and Messenger and WhatsApp are beginning early stages of monetisation, he said.