Facebook Inc (NASDAQ:FB) will soon roll out its first major change to its signature News Feed in several years, and many investors and analysts are worried that the revamp could damage its business.
Don’t count analyst Daniel Ives of GBH Insights among those doubters, however. He’s more bullish than ever on the social media behemoth, and explained his viewpoint to CNBC earlier this week:
“Facebook will continue to grow its massive global installed base in our opinion while importantly monetizing users especially on the Instagram side of the house, which remains the ‘core 1-2 punch’ that underlies our bullish thesis on the name,” Ives said in a note released late Thursday.
“We note that Instagram already announced 800 million MAUs in September (vs. 700 million in April) as this platform remains a ‘golden jewel’ in Facebook’s platform in our opinion with healthy monetization and ad growth set to play out in 2018 based on our forecasts.”
Ives notes that any hit to publishers from the impending News Feed changes should be mitigated by the above “strong monetization tailwinds.” He raised his price target on FB to $225 from $210 as a result, suggesting a 25% upside to current levels.
Facebook Inc shares closed at $179.37 on Friday, down $8.40 (-4.47%). Year-to-date, FB has gained 1.65%, versus a 4.14% rise in the benchmark S&P 500 index during the same period.