Jefferies Says Current Revenue Growth Estimates for Facebook Too Conservative

By Dhirendra Tripathi – Facebook (NASDAQ:) shares were flat Thursday but Jefferies (NYSE:) said the current estimated 34% year-on-year revenue growth is too conservative.

Analyst Thill raised his price target to $360 from $350 earlier while retaining buy rating on the stock.

Thill’s target is nearly 20% higher from the stock’s current level of $301. 

The analyst believes the stock holds potential for upside surprises, citing several reasons for his optimism. According to him, advertising spending on social platforms is ahead of original plans while a reviving economy is driving companies to spend more on branding.

Also, Apple’s (NASDAQ:) proposed privacy settings in iOS14, changes that could hurt Facebook, haven’t yet been implemented.

Apple’s planned privacy update will inform users about the apps tracking them and ask them if they approve of it.

Facebook is against the changes. The social media giant wants to continue to show Apple users personalized ads, like it does now with them and Android phone users.

“In addition to a better-than-expected Q1, we also anticipate positive commentary around ecommerce initiatives (for e.g. number of users or businesses using Shops) and a lowering of the FY21 expense guide to support the stock,” Thill wrote.

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