Facebook: Is the Worse Behind Them?

Jefferies analysts Brian Pitz and Brian Fitzgerald launched their coverage of Facebook’s (NASDAQ:FB) stock in optimistic fashion: giving it a buy rating and a $30 price target. While Facebook shares hit a new low of $17.73 earlier this week, the analysts praised the social network for its “unprecedented” scale and the “differentiated, valuable asset” it offers marketers in the form of its user data.

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Shares of the company closed 4.8 percent up at $18.58 on Wednesday.

“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,” the analysts wrote in a note to investors. “Lockup pressure looks inevitable through December. But expansion into other business areas also looks inevitable, and at the current price investors effectively receive this optionality for free.”

Some of the pressure related to the freeing up of share lockups was also eased by the company, which announced on Wednesday that some of its biggest holders, including co-founder Mark Zuckerberg, will not sell their shares for at least another 12 months.

Jefferies also called Facebook’s opportunity for advertising full of “compelling upside” and added that the social network was likely to soon expand its advertising network, target ads through user location, and improve its search function and market share.

Despite Jeffries’ positive outlook, Facebook’s price target falls just below the Wall Street average of $32.63. The highest price target for Facebook shares is $41, while the lowest is $15.

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