On July 31, 2020, JPMorgan analyst Doug Anmuth raised the firm’s price target on Facebook to $300 from $290 and reiterates an Overweight rating on the shares. Despite a slow start to the quarter, the company saw “considerable ad revenue recovery” during May and June, Anmuth tells investors in a post-earnings research note. The analyst views Facebook’s Q3 outlook as conservative and reiterates the shares as a top idea.
Wedbush analyst Michael Pachter raised the firm’s price target on Facebook to $300 from $250 and keeps an Outperform rating on the shares. Pachter says moderating ad spending declines and continued outsized audience and engagement growth drove better-than-expected top-line results in Q2 and adds that guidance implies a continuation of current ad trends through Q3.
Raymond James analyst Aaron Kessler raised the firm’s price target on Facebook to $280 from $240 and keeps a Strong Buy rating on the shares following the company’s Q2 results. The analyst continues to expect solid long-term revenue growth as well as increasing monetization of new platforms, and says valuation is attractive.
Jefferies analyst Brent Thill raised the firm’s price target on Facebook (FB) to $300 from $285 and keeps a Buy rating on the shares. Despite the boycott driving fears of advertisers leaving the platform, active advertisers grew to over 9M, noted Thill, who thinks the company’s guidance for 10% year-over-year revenue growth in Q3 looks conservative. However, given ad targeting headwinds, such as Apple’s (AAPL) privacy changes, he thinks Facebook is “right to be conservative.”
Deutsche Bank analyst Lloyd Walmsley raised the firm’s price target on Facebook to $305 from $275 and reiterates a Buy rating on the shares. The analyst sees a “nice path for shares to move higher” after Facebook last night “cleared up a lot of nervousness around the pace of recovery and the impact of the boycotts. ” While July commentary did not speak of improvement from June, the overall outlook for Q3 growth consistent with Q2 seems like typical Facebook conservatism, Walmsley tells investors in a research note. He thinks August trends should improve as the “boycott begins to fade,” and expects political advertising to ramp on the platform as the November elections approach.
Credit Suisse analyst Stephen Ju raised the firm’s price target on Facebook to $315 from $305 and keeps an Outperform rating on the shares following the company’s Q2 results. The analyst says the rise in engagement afforded Facebook the opportunity to increase ad impressions by +40% to offset ad price compression of -21%. He adds that as the resulting free tools to paying advertiser conversion rate currently stands at ~2%, the opportunity remains for Facebook to continue to propel ad revenue growth with a return to historical conversion rates of 5%-7% with easy-to-use advertising products.
On July 30, 2020, Facebook, Inc. (Nasdaq: FB) reported financial results for the quarter ended June 30, 2020.
Facebook reported Q2 EPS of $1.80 versus the consensus estimate of $1.39. The company reported Q2 revenue of $18.69B versus the consensus estimate of $17.4B.
DAUs were 1.79 billion on average for June 2020, an increase of 12% year-over-year. MAUs were 2.70 billion as of June 30, 2020, an increase of 12% year-over-year. DAP was 2.47 billion on average for June 2020, an increase of 15% year-over-year. MAP was 3.14 billion as of June 30, 2020, an increase of 14% year-over-year.
Facebook said: “In the first three weeks of July, our year-over-year ad revenue growth rate was approximately in-line with our second quarter 2020 year-over-year ad revenue growth rate of 10%. We expect our full quarter year-over-year ad revenue growth rate for the third quarter of 2020 will be roughly similar to this July performance. There are several factors contributing to this outlook, including: First, continued macroeconomic uncertainty, including the pace of recovery and the prospects for additional economic stimulus; Second, our expectation that some of the recent surge in community engagement will normalize as regions reopen; Third, the impact from certain advertisers pausing spend on our platforms related to the current boycott, which is reflected in our July trends; and Lastly, headwinds related to ad targeting and measurement, including the impact of regulation, such asthe California Consumer Privacy Act, as well as headwinds from expected changes to mobile operating platforms, which we anticipate will be increasingly significant as the year progresses.”
“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times,” said Mark Zuckerberg, Facebook founder and CEO. “And we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”
The four biggest tech companies all beat on their quarterly earnings announcement. Mark Mahaney, lead internet analyst at RBC Capital Markets, joins “Squawk Box” to discuss what investors can take away from the blowout quarter for Big Tech.