Facebook (FB): CEO Mark Zuckerberg’s Congressional Testimony Is a ‘Positive Sign for Investors,’ Cheers Wells Fargo
Wells Fargo's Ken Sena is encouraged on FB, glad to see Zuckerberg's focus on AI tools to detect future 'attempted abuses' like Cambridge Analytica from happening again.
Facebook, Inc. (NASDAQ:FB) stock has been put under the spotlight ever since the news first spread like wildfire of the Cambridge Analytica data breach scandal. Yesterday was CEO Mark Zuckerberg’s first day of Congressional testimony, which continues today, and investors must have liked what they heard; shares made a roughly 4% rally, beating out Nasdaq’s 2% rise.
Wells Fargo analyst Ken Sena believes it to be clear that Zuckberg outclassed investor expectations from the way shares recovered, praising the leader for “a message well delivered.”
In reaction, the analyst reiterates an Overweight rating on FB stock with a $230 price target, which implies a 40% upside from current levels. (To watch Sena’s track record, click here)
From where Sena stood was a “focused” and “engaged” Zuckerberg ready to “best to rectify the company’s loss in public trust and the company’s roadmap to safeguard against future abuses,” which the analyst takes in bullish stride: “We see this as a positive sign for investors, even though another long day of testimony remains ahead.”
After all, though Facebook’s shares have dropped 10% in value on back of the negative buzz, “Facebook’s P/E was already trading at a discount to the group and its growth profile,” Sena contends, asserting: “This is coupled with the fact that we believe our estimates for the quarter and year to be already risk-adjusted on both the top and bottom lines. Therefore, while [yesterday’s] testimony and the buildup to it seem to make clear that some regulatory oversight may be inevitable, at least where FB’s efforts to stem abuse are concerned, we nevertheless take heart in the repeated mention by Zuckerberg that AI tools will play an increasing role in the effective detection and oversight of such attempted abuses.”
TipRanks showcases FB stock is a confident bet among sell-side analysts on Wall Street. Consider that out of 33 analysts polled in the last 3 months, a whopping 30 rate a Buy on FB stock, 2 maintain a Hold, while just 1 issues a Sell. With a return potential of nearly 34%, the stock’s consensus target price stands at $220.71.