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Facebook Inc (FB) Added to Bank of America US 1 List, Hits New High

Facebook Inc (NASDAQ) Mark Zuckerberg

Facebook Inc stock hit a new high on Tuesday morning before the market opened in New York. The firm, which is set to release its earnings numbers for the three months through June on July 29, is still riding the wave set off by Google earnings released last Thursday afternoon. Shares crossed $99 for the first time in pre-market trading on Tuesday.

Facebook Inc zuckerberg

Facebook makes the top grade

Merrill Lynch’s US 1 List is a collection of top investment ideas. Facebook officially joined that list this morning after Justin Post, the BoA analyst following Facebook, found the stock worthy of inclusion.

 

Mr. Post said that Facebook valuation looked good when compared to its peers, and the firm’s downside was not all that big despite the recent jump in value. He said that clients should Buy shares in Facebook and he put a $105 price target on the firm’s stock.

The median Wall Street price target on Facebook  stock now sits at $100, close to the price shares are set to open at on Tuesday morning. Analysts may update those price targets given the recent rise in the price of shares.

Heading into the release of Facebook’s own earnings, Wall Street may also want to boost its earnings and sales outlook given Google’s success.

Instagram, Messenger and WhatApp are set to line the next part of Facebook’s growth path. Instagram has started to boost its ad load and Wall Street will be looking closely to the segment for promise of future earnings in the firm’s Q2 earnings report.

Messenger and WhatsApp have yet to be used for big sales, but the market no longer doubts that Facebook can make great ads for mobile. All that remains is for the product and ad teams at Menlo Park, California to figure out how to do so without sending users running.

Facebook has increased both engagement and ads on mobile in the last year, meaning that it has figured out how to sell ads without scaring away the people that use its service.

Facebook stock hits new highs

To date Facebook’s all time intra-day high stands at $98.60, a number set on Monday afternoon. This morning’s market indicates that that number is set to head even higher on Tuesday, though the gain may fade as the morning wears on.

In the five days of trading through Monday shares in Facebook gained more than 11 percent. The major cause of the rise appears to be the earnings numbers that Google released on Thursday July 16.

The Mountain View, California firm beat Wall Street estimates, and traders appear to think that the jump in sales means a thriving ad market. Facebook should be able to grow faster than Google in that market, if trends of the last twelve months keep up, and in the minds of traders that means shares should keep rising.

We’ll see if that thesis holds true when Facebook shows the world its earnings number for the three months through June on July 29. Wall Street forecasts, by consensus, earnings of 47 cents per share. Sales are set to hit $3.974bn.

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