Capital IQ estimates revenue will increase 37% in 2015 due largely to its advertising business. They note the company is making impressive gains in mobile revenues, which have increased from “limited levels” in Q3 2012 to $2.4 billion in Q1 2015. And they expect overall revenue to increase another 34% in 2016.
Credit Suisse increased its 2015 estimate for adjusted earnings per share (EPS) to $1.93, from a previous estimate of $1.88, on revenue of $16.5 billion. Its analysts have a price target of $106 on FB stock, which is almost 55 times earnings. But they expect the company to earn $5.83 in 2017, which puts their price target at a more modest 18 times earnings. They have an “outperform” rating on FB stock and consider it a top pick for 2015.
Since early 2014, FB stock has maintained an orderly bull channel, advancing from about $55 to a high of over $89 in June. The consistency of its advance is impressive, but all stocks fluctuate and Facebook is no exception.
Support for its long-term trend is at slightly over $80 with solid support at its 50-day moving average at $81.60. An interior bull channel has a support line at $84, and that is where traders should purchase FB stock. The price target for a four-month trade is $100, which would result in a nearly 20% gain. However, investors may wish to hold FB stock for much higher long-term returns.
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