facebook (FB) – Get Report shares rose sharply Friday after Credit Suisse analyst Stephen Ju raised its price target from $400 to $480, ahead of the social networking company’s second-quarter earnings next Wednesday.
He kept his rating at outperform.
“As Facebook (and the broader online advertising industry) continues to benefit from budget recovery for the second quarter, our focus is shifting back to insult and product development,” Ju wrote in a commentary.
“We believe the investment thesis comes back to the conversion of its merchants/company profiles into paying advertisers.”
Further, “At the time of the last reveal (Q3 2020), the Facebook core app had 200 million business profiles and 10 million advertisers, while Instagram had 4 million advertisers,” Ju said.
“From a short-term tactical perspective, our conversations with advertisers continue to point to ad budget recovery in most industries.”
Analysts at Credit Suisse also raised their price target on Alphabet (GOOGL) – Get Report, Google’s parent company, ahead of next week’s second-quarter earnings thanks to innovation-led gains in the critical advertising sector.
Facebook recently traded at $373.54, up 6%, and is up 36% in the past six months amid strong financial performance. The S&P 500 is up 15% over that period.
Meanwhile, social networking giant Twitter TWTR saw its shares surge, following better-than-expected second-quarter gains and a promise from CEO Jack Dorsey of a “great future” with Bitcoin. Shares of Instant messaging service Snap (SNAP) – Get Report surged as user growth kicked off in the second quarter.
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