Facebook Added To Goldman's Focus List (FB)

Facebook Inc. (FB) had quite a week.

On Tuesday, the social media company’s shares reached a 52-week high of $129.94. A day later, Morgan Stanley (MS) reiterated its overweight rating of the stock and hiked its target price to $160 from $150. (See also: Morgan Stanley Raises Facebook Price Target).

Today, analysts at Goldman Sachs Group Holdings Inc. (GS) added the stock to their "Focus List" for the Information Technology space. According to Derek Bingham, analyst the firm, Facebook is an “asset-light tech disruptor” and a “long term share gainer” in the digital advertising sweepstakes.

The social media network’s engagement stats – users spend 30 minutes per day on its app – “offer a myriad of ancillary future opportunities in areas such as Messenger app, Facebook M (virtual assistant) and Facebook login.” Goldman’s assessment follows that of Morgan Stanley’s earlier this week. The latter’s analyst allayed concerns relating to advertising slowdown arguing that those concerns had led to Facebook trading below its median relative P/E. (See also: Can Facebook Hit $200 In Two Years?)

According to analysts at Bank of America, Facebook’s sales will rise by 53%, 24.5%, and 27.7% in 2016, 2017, and 2018 respectively. A large part of that rise will come from growth in user numbers. The social network already has 1.2 billion users on its social network. Its messenger app, which dominates the chat space, is expected to have 105.2 million users in the US this year. That’s twice as much as its nearest rival Snapchat. By 2020, 41.6% of the U.S. population or 139.2 million users will be on Facebook Messenger.

During its last earnings call, Facebook reported revenue growth of 59% year-over-year to $6.4 billion. The eponymous social media network remains the mainstay of revenues for its business. However, it is expanding into newer business areas and technologies, such as virtual reality and artificial intelligence. Over the next five years, the Menlo Park-based business has plans to build out its products from these acquisitions into “full ecosystems, developers and business.”

By Rakesh Sharma

Source: http://www.investopedia.com/news/facebook-added-goldmans-focus-list-fb/