Facebook (FB) Gets Upgrade, $38 PT from Raymond James

Facebook Inc. (NASDAQ:FB) is perhaps one of the more anticipated earnings reports this week, as the social-network firm is due to release its fourth-quarter earnings after the bell Wednesday. But to get a sneak peek at what might be coming in the report, one can look to what some analysts put out in their weekly research notes – and the first clue may be coming from Raymond James, which has put forth a bullish expectation for the stock.

Raymond James’ Aaron Kessler upgraded Facebook Inc. (NASDAQ:FB) from Market Perform to Outperform and set a price target at $38 per share – which is where the stock started at its IPO last May. Kessler predicted quarterly revenue at $1.57 billion and profits at 18 centers per share, which are above consensus estimates of $1.50 billion of revenue and 16 cents EPS. Kessler added that he expects advertising revenue for the quarter to be $1.35 billion, which is up from the $1.28 billion consensus.

Why such optimism for Facebook Inc. (NASDAQ:FB)? Kessler writes of three key reasons – better monetization thanks to increased mobile usage, better ad formatting and international market share growth; positive usage trends, again driven by mobile; and overall expectation of bettering consensus estimates. Kessler also noted continued enthusiasm among Facebook’s ad partner, as he wrote that there was “strong advertiser demand for Mobile, News Feed and FBX (Facebook Ad Exchange).”

Overall, Facebook Inc. (NASDAQ:FB) has performed 35 percent better than the S&P 500 over the last three months, and the stock has a 12-month consensus price target of $33.50, which is a 6-percent premium on Friday’s close of $31.54. After the first half-hour of trading Monday, Facebook stock was up more than 2 percent from the open to about $32.20 per share.

What do you think? Is Facebook Inc. (NASDAQ:FB) truly on its way back? Is this rally from $18 per share legitimate? What do you expect from Wednesday’s earnings report, and what numbers are most important to you? We’d love your feedback in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

Please see these related FB articles:

Facebook: 9 Companies Learn the Hard Way About Social Media

Facebook’s Graph Search Raises Privacy Flags

Facebook is Among 3 Web 2.0 Companies We Analyze