Will Investors Listen to This Facebook Analyst in Upcoming Week?

Facebook Inc. (NASDAQ:FB) has found a friend in Baird analyst Colin Sebastian, who has initiated coverage on the stock with a $37 price target and outperform rating. The target, a mere dollar below the initial public offering price of $38, is big news given the stock’s fast descent, losing more than 25 percent since its debut less than a month ago.

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Sebastian cites the company’s innovative history, becoming the “gravitational center of social media” since its humble beginnings 8 years ago. In his research note, the analysts suggest that Facebook is well positioned to grab more and more of the $500 billion global advertising market thanks to its massive collection of user data. The note acknowledged near-term hindrances including, a slow shift to mobile and unimpressive social game trends, but still concludes that the stock is a solid long term investment.

According to Sebastian, “We expect growth to be largely driven by new ad formats, higher ad pricing, the launch of a third-party ad network, and increasing transaction-related revenues.” Baird anticipates earnings of 52 cents for this year and 65 cents for 2013. Facebook finished Friday down at $27.72, down 6.35 percent from the previous close and down 26 percent from its IPO price.

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