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Facebook Retreats Following Janney Downgrade

NEW YORK (TheStreet) -- Shares of Facebook (FB) are falling after research firm Janney Capital downgraded the stock to Neutral from Buy in a note to investors today. The firm predicted that the company's growth would "naturally decelerate" next year.

WHAT'S NEW: The growth of Facebook's revenue, user base, and engagement levels will "naturally decelerate" next year, Janney Capital analyst Tony Wible wrote. Moreover, the stock's elevated valuation will also pressure the shares, the analyst believes. Although the company has "tremendous monetization opportunities" in areas unrelated to its core mobile ad market, many investors already expect the company to capitalize on these opportunities, contended Wible. On a positive note, investors are underestimating the potential magnitude of a Facebook "payment product," according to the analyst, who thinks that such a product could potentially be more lucrative than any of the company's other well-known offerings. However, Facebook is likely to roll out a payments product gradually, Wible added. He kept an $82.50 price target on the shares.

WHAT'S NOTABLE: After speaking with sources in the industry, Ralph Schackart, an analyst at research firm William Blair, said in a note today that he expects Facebook to use its acquisition of video advertising exchange LiveRail to compete with DoubleClick, an ad network owned by Google (GOOG) . Facebook is looking to use its superior consumer data to help it compete with DoubleClick, the analyst added. He kept an Outperform rating on Facebook shares.

PRICE ACTION: In mid-morning trading, Facebook fell 1.5% to $74.84.

Reporting by Larry Ramer.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

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