We Would Add To FB Positions Heading Into 3Q Results, Says Deutsche Bank
In a research report released to investors today, analyst Ross Sandler of Deutsche Bank reiterated a Buy rating on Facebook (NASDAQ:FB) with a $90 price target, as the company is heading into third-quarter earnings results.
Sandler wrote, “Similar to last quarter, buyside expectations are more or less in-line with what we expect to hear from FB, namely low-to-mid- 60%’s ad revenue growth and significant margin expansion. There is increasing scarcity for growth and among large cap and given the many new revenue opportunities in front of Facebook in 2015 (especially Instagram, Video, WhatsApp and Payments) we see it as a must own.” The analyst continued, “We estimate FB controls nearly +25% of digital time spent (PC + mobile) across its various brands in the US, and yet only captures around 10% of US digital advertising (the gap is likely larger globally), hence is under-earning vs. its potential and doesn’t yet reflect our optimistic view at ~37x 2015 EPS. Facebook is one of the high-quality high-multiple names we want to own on the calendar flip to ’16.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ross Sandler has a total average return of 9.3% and a 50.6% success rate. Sandler has a 47.1% average return when recommending FB, and is ranked #271 out of 3332 analysts.