Citi's FANG Update: Targets Lowered, But Still Positive On Tech Stocks

Citi has lowered its price targets on the shares of Facebook Inc FB, Amazon.com, Inc. AMZN, Netflix, Inc. NFLX, Alphabet Inc GOOGL to reflect the impact of stock-based compensation (SBC). The brokerage also revised its target prices on LinkedIn Corp LNKD and eBay Inc EBAY. Facebook – Buy – TP cut to $133 from $134 Amazon – Buy – TP trimmed to $760 from $780 Netflix – Neutral - TP lowered to $116 from $121 Alphabet – Buy – TP slashed to $900 from $924 LinkedIn – Neutral – TP cut to $130 from $194 eBay – Buy – TP raised to $32 from $31 "We've found that most investors still don't fully account for the likely ongoing dilution from stock comp grants in their valuations. We are adjusting our models and price targets to better reflect the impact of stock-based compensation," analyst Mark May wrote in a note to clients. "Some may say this is a bear market issue, but we believe it is a necessary change that is long overdue. In short, our previous models did not fully capture the likely ongoing dilution from future share grants as part of employee compensation," analyst May continued. "We remain positive on AMZN, GOOGL, FB AND EBAY despite the impact of SBC, while the impact of SBC provides additional reason to remain cautious on LNKD and Twitter Inc TWTR," the analyst added.