Facebook's main app looks strong heading into the new year, according to one analyst.
Writing in a note on Wednesday, Deutsche Bank's Lloyd Walmsley said that "renewed strength" in Facebook's core app could be critical to its continued growth in 2020. Facebook (FB) - Get Report shares were up 2.56% on Wednesday afternoon to $203.46.
According to Walmsley, the renewed strength in core Facebook has been driven by improvements to its newsfeed algorithms, the building out of features for its Marketplace and Groups sections and other product work.
Deutsche Bank raised its target price to $270 from $260 and maintains a buy rating on the stock.
Walmsley wrote that improving engagement in core Facebook could prove "durable" in 2020 and mitigate investor fears that younger users are shunning the Facebook app in favor of other social channels and that sharing has declined.
Further, products such as Marketplace, combined with Facebook's recent rollout of Facebook Pay, could drive further monetization of core Facebook, according to Walmsley.
Shares of Facebook are up 49% year to date.