Facebook(FB:NSD) Rosebnblatt Upgrades target on revised earnings

STA Research
by: STA Research

Rosenblatt’s analyst Mark Zgutowicz today lifted his target on Facebook to $315 from $244.  The analyst has kept the Buy rating on the stock intact. Zgutowicz’s reasoning for the increase is based on revised earnings to $79.4 billion and reduced equity risk premium, down 80bps since April and believes Facebook is the best risk/reward scenario going into the company’s Q2 earnings report. STA Research has a average target on the stock of $246, and a consensus Strong Buy rating. STA’s  view of the stock is Bullish with a score of 7.1 out of 10, where 0 is very bearish and 10 very bullish.                                                                                                                                                                                                                                                                                                                       
What to like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Superior risk adjusted returns
This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.
Low volatility
The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although
stability is good, also keep in mind it can limit returns.
Superior return on equity
The company management has delivered better return on equity in the most recent 4 quarters then its peers, placing it in the top quartile.
Superior capital utilization
The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.
Superior return on assets
The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Superior Earnings Growth
This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.
Superior Revenue Growth
This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.                                                                                                                                                                                                                                                                                                                                                              
What to not like:
Overpriced compared to earnings
The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Overpriced on cashflow basis
The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

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