Axiom Initiates Buy On Facebook; Sees 33% Upside For The Stock
In a research report published Monday, Axiom analyst Victor Anthony initiated coverage on shares of Facebook Inc (NASDAQ:FB) with a Buy rating and a $105 price target, which represents a potential upside of 32% from where the stock is currently trading.
Anthony noted, “Facebook is the best way to play the secular shift of advertising dollars to mobile. User growth and engagement remains healthy, core monetization remains strong, and over the next 2 -3 years, we see multiple potential $1B revenue opportunities that should lead to upside to consensus estimates and fully offset the expense ramp in 2015.”
The analyst explained his price target, “Our $105 price target for year-end 2015 is based on a 20x multiple to our 2016 EBITDA estimate of $14.1B (consensus: $13.8B), for upside of 32%. Our target multiple is reasonable given that it is within the context of a 30% three-year EBITDA CAGR (2014- 2017) and is consistent with the current trading multiple.”
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 19.2% and a 72.1% success rate. Anthony has a 52.1% average return when recommending FB, and is ranked #46 out of 3492 analysts.