Stifel Nicolaus Thinks Facebook’s Stock is Going to Recover


In a report released yesterday, Scott Devitt from Stifel Nicolaus reiterated a Buy rating on Facebook (NASDAQ: FB), with a price target of $202. The company’s shares closed yesterday at $154.92, close to its 52-week low of $149.02.

Devitt noted:

“We forecast total revenue growth of +33% y/y in 3Q. Existential questions around user growth maturation, revenue deceleration, and core platform durability hit the mainstream following last quarter’s outlook. While we recognize these concerns are relevant, we view the risk as reflected at current levels with shares trading at 16x 2020 GAAP EPS ex-cash on “de-risked” estimates versus prior to 2Q. The company is positioned to grow at 20%+ over the next three years and we view near-term revenue estimates as achievable. Despite the recent user maturation in 2.5B+ global user base remains intact and hooked on the product. We reiterate our Buy rating and $202 Price Target.”

According to TipRanks.com, Devitt is a top 100 analyst with an average return of 20.8% and a 67.1% success rate. Devitt covers the Technology sector, focusing on stocks such as Paypal Holdings, Eventbrite Inc, and Alphabet Inc.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Facebook with a $204.32 average price target, which is a 31.9% upside from current levels. In a report issued on October 15, Loop Capital Markets also initiated coverage with a Buy rating on the stock with a $210 price target.

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Based on Facebook’s latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $13.23 billion and net profit of $5.11 billion. In comparison, last year the company earned revenue of $10.33 billion and had a net profit of $4.7 billion.

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