The world is relying on technology more than ever, and tech companies are pulling out all the stops to continuously innovate new ways to enrich their platforms. Growth prospects are alluring, owing primarily to digitalization and rapid adoption of technologies like augmented reality (AR), virtual reality (VR), and artificial intelligence (AI).
Facebook’s (FB) continuous innovations make it well-poised to gain from this digital advancement while also boosting its competitive position. (See Facebook stock charts on TipRanks)
Analyst Weighs In
Analysts are bullish on the stock. One such analyst is Brian White of Monness, who maintained a Buy rating and a price target of $460. This reflects a potential 12-month upside of 32.3% from the Wednesday closing price of $347.71.
FB closed up Wednesday at a price of $347.7 per share.
White is of the opinion that Facebook should trade at a healthy premium to the market and the entire technology sector, given the company’s encouraging sales figures, healthy earnings growth, and strong operating margins.
The analyst expects Facebook to ride high on its improving advertisement spending environment and expects the social giant to gain from the “accelerated digital transformation with its new initiatives.” White covered Facebook’s recent innovations in his report.
The five-star analyst stated that Facebook has recently announced a range of new shopping and discovery tools, in line with its growing e-commerce efforts. The tech giant has expanded Facebook Shops to WhatsApp messaging app in several countries. In the U.S., businesses will be able to bring Shops product listings to Facebook Marketplace.
On top of that, White noted that Facebook has invested in immersive technologies like augmented reality (AR) and artificial intelligence (AI) to enhance the user shopping experience. Furthermore, FB plans to test an AI tool called Visual Search on Instagram, allowing users to click on items and find similar products in Shops. Also, it plans to put ads in its Oculus Quest virtual reality (VR) headset.
White remains pleased to see that the company is coming out with new ideas to make the most of the increasing digitalization in every sphere.
In regard to lawsuits against FB, it would not be an exaggeration to say that tech giants have already been under regulatory scrutiny, which drains out a lot of money and also harms their reputations.
Although Facebook has been involved in numerous lawsuits, the social networking giant was fortunate recently.
FB Lawsuit Dismissed
The U.S. District Judge James Boasberg dismissed an antitrust lawsuit against the social networking giant, which accused Facebook of breaking the law by shutting out competition through its Instagram and WhatsApp acquisitions. The lawsuit filed by the Federal Trade Commission (FTC) and a separate antitrust lawsuit filed by a coalition of states was called “legally insufficient” by Boasberg.
Analyst Justin Post of Merrill Lynch reacted positively to the dismissal news, stating that the ruling decision in favor of Facebook, “highlights the hurdles U.S. antitrust enforcers face in trying to break up tech companies, and 2) a noticeable change from continued negative regulatory news over the last year.”
Consider the ruling to be a “small win in a long battle,” the analyst increased the price target of the stock to $400 (15% upside potential) from $390 and maintained a Buy rating.
On TipRanks, Facebook has an analyst rating consensus of Strong Buy, based on 34 Buy ratings. The average Facebook price target is $390.47, reflecting a potential 12-month upside of 12.3%.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
