Axiom analyst Victor Anthony is gearing up for Facebook Inc’s (NASDAQ:FB) second-quarter earnings report scheduled to be released tomorrow afternoon after the closing bell, with a conference call at 2:00 PM PT. The analyst raised the price target from $105 to $117, while reiterating a Buy rating on FB. The new price target represents a potential upside of 25% from where the stock is currently trading.
Anthony wrote, “We anticipate upside to estimates as checks throughout the quarter have been positive. Estimates are likely to increase over the next two years as catalysts make their way into Street models. In our thesis update note on June 17, we noted that Facebook should be viewed as a global media communications platform rather than a pure social media company, and investors should continue to assign premium multiples to Facebook’s valuation. We have shifted our valuation to reflect 2017 estimates and have increased our price target to $117 for year-end 2016 from $105 for year-end 2015.”
“Call commentary will likely focus on the 8 pillars of growth: 1) Newsfeed monetization and ad units, 2) Performance of auto-play video ads, 3) WhatsApp user growth, 4) Messenger growth and future monetization, 5) Ad Tech, 6) Oculus, 7) FAN, and 8) Internet.org. Facebook is likely to maintain guidance for Non-GAAP expense growth of 50%-60% (we model 59% YoY). Interesting news items in the quarter included: 1) Messenger no longer requiring a FB account, 2) Messenger expanding payments, 3) Instant articles, 4) launch of the Buy Button, 5) FB to start sharing ad revenues with video creators, and 6) Instagram launching direct response ads and planning to leverage data from Facebook.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Victor Anthony has a total average return of 15.3% and a 64.1% success rate. Anthony has a 53.6% average return when recommending FB, and is ranked #102 out of 3717 analysts.
Out of the 46 analysts polled by TipRanks, 42 rate Facebook Inc. stock a Buy, 3 rate the stock a Hold and 1 recommends Sell. With a return potential of 0.9%, the stock’s consensus target price stands at $94.71.