Piper Jaffray Bullish On Facebook, Says Negative Headlines And Regulatory Challenges Priced In

Despite an onslaught of negative headlines, Facebook, Inc. FB is having another good year in 2019, and one analyst said Tuesday the company should continue dodging negative headlines and focus on leveraging its core business.

The Analyst

Piper Jaffray analyst Michael Olson initiated coverage of Facebook with an Outperform rating and $230 price target.

The Thesis

Olson said Facebook will likely continue to get hit by negative news-flow. But at this point, he said negative media coverage is already priced into the stock.

“Following a turbulent few years for Facebook, we believe the company has emerged well positioned and, with increased opex/capex spend now easing, along with evidence (in the form of recent quarterly results) that neither users or advertisers have abandoned Facebook properties, investors have taken a more optimistic view of FB shares,” Olson wrote in a note.

Facebook is one of the largest market share winners in the global online advertising space, which is expected to account for 60% of global ad dollars spent within the next four years, according to Olson. He projects global online advertising spend will gro from around $300 billion today to around $500 billion by 2023.

Olson said Instagram Shopping and Facebook Market place are still in their early stages of development and represent significant growth opportunities.

Benzinga’s Take

There’s no question Facebook is facing headwinds from the media and from regulators. But Facebook’s challenges are widely known at this point, and the social media giant continues to defy naysayers by putting up impressive growth numbers quarter after quarter.

Facebook's stock traded around #196.35 per share at time of publication.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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