Here’s One Rationale for a Facebook BUY Rating
While shares of Facebook (NASDAQ:FB) plummeted to new lows this morning, dropping 2.5 percent to $17.59, the social media stock just received a buy rating from Jefferies analysts. They termed the company “a potent mix of unprecedented scale” and “high engagement” in a note released this morning.
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The positive rating from the new Wall Street Analysts comes at a critical moment for Facebook. In a regulatory filing made yesterday, Facebook announced CEO Mark Zuckerberg will not sell any of the company’s stock for a year, contrary to what Facebook told investors when the company first went public. Moreover, the company will most likely not be selling any more stock this year.
Jefferies gave Facebook a $30 target, a price that ranks just below the average of $32.63 given by FactSet.
Full of laudatory language reminiscent of Wall Street just after Facebook’s IPO, Jefferies writes, “With a potent mix of unprecedented scale, high engagement, and social + behavioral targeting, we think Facebook is must-buy media for marketers as they follow users online.”
They term Facebook’s user data, “differentiated, valuable asset” for marketers, and call its advertising opportunity full of “compelling upside.”
Jefferies are not the only analysts giving Facebook a buy rating. Facebook has 21 ratings that are the equivalent of buys, 15 at hold and two at sell, according to FactSet. But Jefferies’ note was not all positive. They list concerns around expiring lock-ups, declines in users, and the trouble of making money on mobile devices.
We’re more focused on the concerns since we haven’t been drinking Wall Street’s Kool-Aid. Check out our objective analysis of Facebook’s stock now >>