) shares beautified social media and internet
in a productive session in the
stock market today
Facebook's 30% gap to 34.36 pushed
Social Media Index ETF (
) up 4.93% andPowerShares NASDAQ Internet (
) up 4.74%. The social networking Web site is the fourth-largest
holding in SOCL at nearly 9% of assets and the third-largest
holding in PNQI, accounting for 8% of assets.
very much liked how Facebook boosted second-quarter
revenues by 53% to $1.81 billion and earnings by 58% to 19 cents
How Much Analysts Like Facebook
Growth in mobile ad revenue offset a drop in desktop, showing
how successfully the company adapted as usage shifted to mobile
devices, Credit Suisse analysts wrote in a note Thursday. They
raised their price target on shares from $31 to $36 while
maintaining a neutral rating.
"Our bias remains positive given the company's unique position
to capitalize on the movement of brand advertising dollars
online, but we continue to believe that Facebook shares already
reflect near-medium term benefits of both mobile monetization as
well as FBX (Facebook Exchange), and therefore maintain our
neutral rating on valuation," Credit Suisse analysts wrote.
The number of ads grew 43% year over year while the price per
ad climbed 13%.
"Newsfeed ads were initially launched in third-quarter 2012,
which implies that the company will be going into more difficult
comps in the back-half," Credit Suisse wrote.
BTIG Research upgraded Facebook from sell to neutral,
admitting it was wrong about the threat of competitorGoogle + (
"The magnitude of Facebook's Q2 revenues and earnings 'beat'
dramatically increases our expectations for 2013-2015," BTIG
analyst Richard Greenfield wrote. "Even with growth expected to
slow in 2014 and 2015, the base is so much higher than we
anticipated exiting 2013. While we are lowering our 2013-2015
desktop ad revenue estimates as usage fades, our mobile numbers
have risen dramatically and simply cannot be ignored."
Hoards of analysts raised their price targets on Facebook
including Oppenheimer, Macquarie, Wells Fargo, Susquehanna,
Jefferies, Needham, BMO, JPMorgan, RBC, Evercore, JMP Securities,
Cantor and Cowen; most rated shares buy, overweight or market
Stifel Nicolaus reiterated a buy rating and raised its price
target from $29.00 to $38.01.
Goldman Sachs maintained a buy rating while lifting the price
target from $40 to $46 Thursday morning.
Deutsche Bank rated buy, raising the price target from $37 to
UBS rated buy, lifting the price target from $30 to $36.
SOCL and PNQI have rallied 28% and 31% year to date,
respectively, vs. 18.6% for the SPDR S&P 500 (
Both ETFs trade high above their 50-day and 200-day moving
averages, indicating strong uptrends. SOCL sports an IBD Relative
Strength Rating of 71 and an A- Accumulation/Distribution Rating,
which means it's outpaced 71% of the stock market in the past 12
months and institutions are heavily buying shares.
PNQI has equally healthy ratings with an RS Rating of 77 and
an A/D Rating of B+.
Chasing Facebook shares after such a huge rise is risky as
some big investors are likely to take some profits. SOCL and PNQI
offer a diversified way to invest in the social media giant.
Another ETF That Likes Facebook
Market Vectors Wide Moat ETF (MOAT) has 5% of its holdings in
Facebook. It invests in 20 companies that Morningstar believes
has "sustainable competitive advantages" compared to their
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