As for internet shares in general, “our sector view is near-term pragmatic [after the strong rally of the past year], but long-term bullish,” Evercore analyst Mark Mahaney wrote in a commentary.
“We see over $4 trillion in incremental demand coming online (retail, advertising, travel) by 2025 due to ongoing digital disintermediation.”
Facebook recently traded at $308.96, up 3.45%, and Amazon was at $3,238, up 0.35%.
Mahaney has an outperform rating on Facebook with a $370 price target. It’s a “structural winner, benefiting from permanent pull-forward of ad budgets online,” he said.
“We expect to see material revenue growth acceleration in the first half 2021.” He cited Facebook’s Social Commerce, WhatsApp and Oculus units in particular. Facebook remains on Evercore’s Best Core Ideas list.
The Street's founder Jim Cramer also likes Facebook.
Mahaney has an outperform rating on Amazon with a $4,000 price target. It’s “probably the broadest structural winner with permanent pull-forward of retail spending & ad budgets online as well as acceleration of cloud adoption,” he said.
Amazon is “probably also the single best Internet asset. We also see reasonable valuation, trading modestly below average EV/Sales & EV/EBITDA multiples).”