While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Facebook (NASDAQ: FB ) rose 1% in premarket trading Thursday after Evercore Partners upgraded the social networking giant from equal weight to overweight.
So what: Along with the upgrade, analyst Ken Sena raised his price target to $75 (from $69), representing about 24% worth of upside to yesterday's close. So while momentum traders might be turned off by Facebook's price pullback in recent months, Sena's call could reflect a sense on Wall Street that its growth prospects are now too cheap to pass up.
Now what: According to Evercore, Facebook's risk/reward trade-off is rather attractive at this point. "The upgrade considers the recent pull-back (in spite of an exceptionally strong quarterly result) and new work on FB's mobile ad networking initiative (FB Audience Network), which this report explores," said Sena. "In a nutshell, FB now monetizes mobile time spent to the tune of 9:1 the industry (x-Search) which supports the notion that FB can meaningfully increase the size of the mobile advertising pie (versus just taking share)." When you couple those prospects with Facebook's cash-rich balance sheet and still-reasonable PEG of 1.1, it's tough to disagree with Evercore's upgrade.
Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development Dream Team to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out...and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, AND the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!