A Year After IPO, Finally Time to Buy Facebook?
A day after a highly-anticipated press event where Facebook (NASDAQ:FB) launched a new Vine-rivaling video feature on Instagram, UBS (NYSE:UBS) served the world’s largest social network with a “buy” rating.
The bullishness reflects new ad potential for Facebook, with UBS analyst Eric Sheridan projecting video ads would begin showing up through Instagram later this year with seven-figure potential.
“Our estimates assume that Facebook will be able to monetize daily video ad slots in the seven-figure range,” he said, predicting that ads will begin appearing on Instagram during the second half of 2013.
Mark Zuckerberg hasn't put ads on Instagram since acquiring the picture sharing site for more than $1 billion last year. However, it has been gradually updating its broader ad platform and video is expected to open fresh new potential for Facebook.
UBS also raised its price target on Facebook to $30 from $28 and lifted its 2013 revenue estimate to $6.75 billion from $6.63 billion previously. Wall Street is calling for full-year sales of $6.73 billion, according to a Thomson Reuters poll.
Shares of Facebook climbed close to 3% to $24.53 Friday morning, though they remain off about 36% from their May 2012 IPO price.