NEW YORK (TheStreet) -- Facebook (FB) shares are up 0.24% to $75.19 in early market trading on Monday after analysts at Morgan Stanley initiated coverage on the social media company's stock with an "overweight" rating and a $90 price target.
The firm has an optimistic view of Facebook's ad revenue strategy and sees the company's targeted ads as being effective due to the level of engagement its 1.23 billion users participate in on the website.
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Morgan Stanley also sees Facebook's mobile ad penetration doubling to 70% by 2020 from 35% now, with a yearly growth of 30% per year for mobile Internet time spent on the social media site.
The firm's price target represents a potential upside of 19.7% over the stock's current trading price.
TheStreet Ratings team rates FACEBOOK INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."