Please ensure Javascript is enabled for purposes of website accessibility

Facebook Poised to Shoot 32% Higher, Says Analyst

By Eric Volkman - Mar 29, 2021 at 6:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A Deutsche Bank prognosticator believes the company has several growth levers it can pull.

A strong performer on the stock exchange since its 2012 initial public offering (IPO), Facebook (FB 0.28%) is well positioned to do even better. That's according to a new analysis of the stock from analyst Lloyd Walmsley at Deutsche Bank, who has raised the target price of the shares to a new "street high."

Walmsley's new level is $385, from the previous $355. The former is more than 32% above Facebook's most recent closing price. He's maintaining his buy recommendation on the stock.

Woman in protective mask using a smartphone.

Image source: Getty Images.

The prognosticator believes that ad spending, a crucial source of revenue for the company, will see a rise. He also feels that worries about upcoming changes Apple is making to its user privacy settings will become less of a factor in market sentiment.

"We think investor focus is starting to shift away from fears around iOS changes toward a continued ad recovery and benefits from more eCommerce activity shifting into Facebook's platform," Walmsley wrote in his research note explaining the price target hike.

Facebook already has a massive user base, so it can't rely on significant improvement in those numbers to drive its business forward. Rather, it will be reliant on expanding advertising take and other revenue sources for meaningful growth. Walmsley thinks that it has several levers it can pull for this, including the Tik Tok-like Reels video feature in Instagram. He's estimating that Reels can potentially pull in $21 billion in revenue.

Investors seem to be buying this argument. On Monday, Facebook shares trounced the S&P 500 index by rising to close 2.8% higher on the day.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$200.60 (0.28%) $0.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.