Oppenheimer Remains Bullish On Facebook But Slightly Reduced PT To $88

In a research report issued today, Oppenheimer analyst Jason Helfstein reiterated an Outperform rating on Facebook Inc. (NASDAQ:FB) but reduced his price target to $88 (from $90) on higher ’15 expense guidance.

Helfstein noted, “Although 3Q revenue exceeded Street by 3% & 4Q guidance was in line, FB conservatively guided ’15 non-GAAP expenses +50-70% y/y vs. our +38%E. This is driven by investments in facilities, servers, R&D and sales, to support existing & new initiatives. As ’14 expenses trending 1,000 bps below mgmt.’s initial FY guidance, ’15 expense target looks conservative. Model assumes 20% growth in rev/hour, or 46% below YHOO in 2018, which is conservative with launch of video. WhatsApp overhang not as bad, with sale windows in 4Q & 1Q. Target based on 30x core 2016E P/E, discounted 10%, with conservative $16B valuation for Instagram and $19B for WhatsApp.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Helfstein has a total average return of 18.4% and a 61.1% success rate. Helfstein has a 53.2% average return when recommending FB, and is ranked #120 out of 3350 analysts.

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