Facebook Inc will reveal its earnings for the three months through September on November 4, and Wall Street seems pretty happy with the direction the firm is going, and the numbers it likely booked in the quarter. On Thursday two Wall Street firms upgraded their forecasts for the firm’s numbers, giving Mark Zuckerberg’s concern a boost into the big release.
Robert Peck of SunTrust put a $125 price target on shares in the social network in a report published on Thursday morning. He reckons that the firm had yet another quarter of strong growth, with major momentum from mobile ads. Raymond James analyst, Aaron Kessler took a closer look at the firm’s business in separate report published on Thursday.
Focus on ads at Facebook
Kessler took a look at the results from Facebook affiliate Nanigans and research partner Ampush in order to come up with a model for the firm’s third quarter numbers. Nanigans is an ad tech firm that works with the social network, while Ampush is an ad targeting tech firm.
Raymond James says that a model based on gains made by those firms in the three months shows growth could be 50 percent higher than Wall Street is looking for quarter over quarter. The consensus earnings forecast for the September quarter comes in at 52 cents, while the consensus sales number among sell-side houses sat at 4.37B on Thursday morning.
In Mr. Kessler’s view Facebook shares are set to Outperform in the year ahead. He has a $115 price target on the firm’s shares. That’s ahead of the median sell-side price target of $113.50 on Wall Street right now.
Facebook just makes ads better
Facebook has been working on making the ads on its platform better in many ways over the last year, and, if the views of Mr. Peck and Mr. Kessler pan out, it seems that the firm is earning dividends on the back of those investments.
The firm’s big push, at least in the eyes of Wall Street, over the last few months has been in video. Facebook is working its way up to a level where it can compete with Alphabet Inc owned YouTube in the race to monetize online video.
At the end of the third quarter Facebook unveiled new tools, in what it called “Advertising Week,” to allow ad buyers to see how their ads were working. The firm has also been focused on getting marketers used to the idea that Facebook ads might just be a little bit better when used combined with ads on TV.
At its Advertising Week the firm quoted a Nielsen study that showed that the reach of ads that combined Facebook and TV was 19 percent higher. When it came to younger people, reach of ads that straddled platforms was 37 percent higher.
On this morning’s market shares in Facebook were selling for 98.2, up 1.13 percent for Thursday morning so far. Both Robert Peck and Aaron Kessler reckon the firm has a lot more distance to run, but traders seem nervous about crossing the $100 threshold.