Facebook (FB) and Gucci have sued the head of an international counterfeiting business. In the lawsuit, the two companies allege that the individual has been using several Facebook and Instagram accounts to sell imitation Gucci products.
This first of its kind lawsuit for the two companies underscores Facebook’s fight against the proliferation of counterfeit products on its social networking apps. The company’s terms strictly prohibit infringement of IP and the sale or promotion of phony products. It has also put in place IP protection measures as part of its global program for taking down content.
Facebook insists that collaborations with brands such as Gucci are essential if it is to succeed in tackling counterfeits in its apps. Their partnership is built on a joint commitment to combat the sale of counterfeit goods online. (See Facebook stock analysis on TipRanks)
The social networking giant has also affirmed its commitment to ensuring its platforms are safe for people and businesses to connect and do business. Likewise, it plans to continue working with Gucci in enforcing efforts against counterfeits.
Baird Equity Research’s analyst Colin Sebastian remains bullish on Facebook’s prospects after solid 1Q 2021 financial results. According to the analyst, the results were positive, with upside to revenues and profit margins.
The analyst has also quashed concerns about Facebook’s Q2 outlook reiterating that the company is well-positioned to leverage first-party data and predictive analytics.
“Despite impressive revenue growth and margins, Facebook’s monetization rates on its ads are still very low outside of the US. Over the next two years, we forecast Facebook revenues to increase significantly, reaching ~$130B by 2022, representing a compounded annual growth rate (CAGR) of approximately 30%” Sebastian wrote in a research note to investors.
The analyst has reiterated a Buy rating on the stock with a $340 price target implying 10.71% upside potential to current levels.
Consensus on Wall Street is that FB is a Strong Buy based on 21 Buy and 3 Hold ratings. The average analyst price target of $364.48 implies 18.7% upside potential to current levels.
Facebook scores a 7 out of 10 on the TipRanks’ Smart Score rating system, implying that its performance is likely to align with market averages.