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Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Facebook (FB) Set To Crush An ‘Unbelievable’ Earnings Season


There is no doubt that the markets have been choppy recently. But according to one market expert the future still looks bright. “The market moves with the direction of earnings,” Canaccord Genuity’s chief strategist Tony Dwyer told CNBC. “As long as the economy is positive, that direction of earnings is going up.”

In fact, Dwyer believes that we are set up for an “unbelievable” earnings season. “This quarter alone we’re probably going to be close to 24 percent growth rate versus a year ago in S&P operating profits,” he said.

And for those investors who remain skeptical, Dwyer has this advice: “Outside of a very clearly identified recession period, you don’t want to sell weakness,” Dwyer said. “You want to buy it.”

So with this bullish analysis in mind, we turned to TipRanks’ Earnings Calendar to pinpoint one of the most promising stocks for you to track this earning season, and not surprisingly, Facebook (NASDAQ:FB) leads in this regard.

The social media giant is out with its second quarter data on July 25. So far the signs are bullish that this is going to be another killer earnings season for FB. Note that this is a stock already up 18% since its Q1:18 earnings call (after increasing 9% on the print), while the S&P 500 is up only 4%.

View FB Price Target & Analyst Ratings Details

In his earnings preview, top RBC Capital analyst Mark Mahaney picks FB as his Top Large Cap Long. Mahaney explains: “We still view FB as among the Best Growth Stories in Tech. According to our Ad Surveys, FB ranks as one of the highest ROI platforms & has intrinsically one of the most positive Spend Intentions skews.” Plus he adds “we now see FB Messenger Monetization happening.”

The best part is that FB is still trading at discount prices. “On valuation, FB currently trades @ 20X 19E P/E (~19X excl. cash) — cheap for what is a 30%+ EPS CAGR” writes Mahaney. He has a $250 price target on the stock indicating 21% upside potential from current levels. Encouragingly, this is an analyst that has so far achieved remarkable success with his FB ratings. On FB specifically, Mahaney is currently tracking a 100% success rate and 29.2% average return per rating. (To watch Mahaney’s track record, click here)

How does Mahaney’s bullish bet weigh in against the Street? It appears the analyst is not the only one enthusiastic on the social giant’s prospects, with TipRanks analytics demonstrating FB as a Strong Buy. Out of 28 analysts polled in the last 3 months, 27 are bullish on Facebook stock versus one lonely bear. With a return potential of nearly 11%, the stock’s consensus target price stands at $232.85.

 

Disclaimer: The author has no position or business relationship in any stock or company mentioned in this article. The author is not receiving compensation for this article. This article is intended for informational and entertainment use only, and should not be construed as professional investment advice.