On Wednesday morning, analysts at Stifel reiterated their Buy rating on shares of Facebook (FB) and reaffirmed their $290 price target. Analysts at JMP also recently reaffirmed their own Outperform rating and $305 price target on Wednesday morning. Stifel and Wedbush were not the only two firms to support Facebook this week.
On Monday, analysts at Jeffries also raised their price target for Facebook (FB) to $310, an increase from the stock’s current price of roughly $289 (at time of publication). So what is the hype about you asking? Well look no further than two new products Facebook has introduced - Reels & Shops.
Reels invites you to create fun videos to share with your friends or anyone on Instagram. Record and edit 15-second multi-clip videos with audio, effects and new creative tools. The Reels technology allows users an alternative to competitors like Tik Tok. According to Jefferies, there is plenty of room for the Reels user base to grow. Jefferies also mentions that Reels posts are earning 5-10x the views of what a typical video post for that same account would receive on Instagram.
According to a recent survey conducted by the Jefferies analysts of 819 US Instagram users ages 13+, only 32% of Instagram users in the sample have been using Reels. “50% of Reels users engage at least once daily, signaling a potential gold mine for advertisers.” Advertising is the main revenue driver for Facebook, if Reels starts gaining more attention and viewers this can drastically increase advertising revenue.
Facebook’s newest product Shops was created with the COVID-19 pandemic in mind. We have seen a major switch to online shopping and checkouts and Facebook hopes to support their active sellers, making it easier for them to gain business and exposure. Facebook also notes that Shops will be available to any eligible business and that they will be adding customization features, messaging and new insights
Facebook expands Shops offering eligibility, enabling 160 million small businesses globally that maintain a business page on Facebook platform to transcat with consumers online. Facebook is also adding Messaging to its Shops, building in the capability for businesses to chat with customers through Messenger, Instagram Direct, or WhatsApp. This can help improve the growth and revenue for Facebook by expanding it’s opportunities in increase its share of the eCommerce market.
Jim Cramer and the Action Alerts PLUS team recently covered Facebook and remain upbeat on the stock. The team notes that, “It is pretty remarkable how Facebook was able to increase revenues on a year-over-year basis, despite the uncertainty facing advertising budgets. This is a sign that Facebook continues to gain market share within the industry”
Disclosure: At the time of publication, we have no positions in any of the securities mentioned in this article. We wrote this article ourselves, and it expresses our own opinions. We are not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.