Morgan Stanley analysts think Wall Street is still underestimating how much Facebook can grow.
In a research note, analysts at the investment bank set the stock a new price target of $215.
It’s an abrupt turnaround from just a few months ago, when Facebook’s share price was getting pummeled in the aftermath of the Cambridge Analytica scandal. And it may be largely due to Instagram.
Facebook’s reputation has been battered by the Cambridge Analytica scandal, but Facebook’s business is humming. One big reason: Instagram.
The photo-sharing app is turning into an increasingly important money-maker for Facebook.
According to the estimates of Morgan Stanley analyst Brian Nowak, Instagram will account for 36% of Facebook total ad revenue growth in the second quarter. In a research note published on Tuesday, Nowak reckons that ads on Instagram will bring in $3.8 billion in revenue in Q2, and as much as $4.5 billion in Q4.
That’s especially important as Facebook’s flagship social media service continues to experience a slowdown in the growth of its “ad load” — the number of ads that Facebook inserts into the newsfeed.
The ad load slowdown within Facebook is very deliberate; the company is wary of turning consumers off …read more
Source:: Businessinsider – Finance