Facebook may not rescind Trump suspension, analysts bullish on social media stocks, and other notable stories from this week
Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.
FACEBOOK COULD KEEP TRUMP ACCOUNT SUSPENDED: NBC News' Dylan Byers reported that Facebook (FB) does not have any plans to rescind the indefinite suspension on Donald Trump's Facebook account following his exit from the White House. The ban on Trump's account remains indefinite due to his role in inciting the attack on the U.S. Capitol, Facebook said. However, the social media did not commit to issuing a permanent ban like Snapchat (SNAP) and Twitter (TWTR).
While some may see a new administration as a fresh start for Facebook, it seems that President Joe Biden intends to keep an eye on the large companies. Reuters reported Biden is considering creating a White House position focused on competition policy and issues relating to antitrust. Facebook and many other big tech companies have already been looked into by The Justice Department and the Federal Trade Commission.
BMO Capital analyst Daniel Salmon said Facebook antitrust and political risk remain "acute." He upgraded the stock to Outperform from Market Perform with a price target of $325, up from $270. The analyst sees Apple's (AAPL) rollout of the App Tracking Transparency prompt and subsequent limitations on identifier for advertiser marking as the peak for Facebook's "headwinds from targeting." Apple's move acts as a "clearing event" for the broader issue, Salmon told investors in a research note. From here, vertical integration for e-commerce and more server to server integrations for advertising should help drive a narrative about Facebook having "greater control over its revenue destiny," noted the analyst. Additionally, KeyBanc analyst Justin Patterson raised the firm's price target on shares of Facebook to $345 from $340 and maintained an Overweight rating on the shares. Patterson believes fundamentals at Facebook and Twitter appear strong. However, the analyst expects concerns around regulation could create a near-term overhang on shares.
Lastly, MoffettNathanson analyst Michael Nathanson raised the firm's price target on Facebook to $325 from $285 and kept a Buy rating on the shares.
ADDITIONAL SECTOR ANALYST COMMENTARY: MoffettNathanson analyst Michael Nathanson upgraded Snap to Buy from Neutral with a price target of $57, up from $39. The analyst continues to believe Snap results will "surprise on the upside" as he's 15% above consensus on 2024 revenue and 30% above consensus on 2024 non-GAAP operating income. Patterson also raised the firm's price target on
Snapchat and Pinterest (PINS) citing positive revisions driven by a strong 2021 advertising environment. He sees revenue growth driven by re-openings, budget shifts, and strength among new formats and the omni-channel retail vertical.
Sprout Social's (SPT) price target was raised by BTIG analyst Matt VanVliet to $71 from $55 and he reiterated a Buy rating on the shares citing his adjustment in the company's long-term growth expectations given the ongoing impact of the pandemic, with the extended shutdowns and "work-from-anywhere" mandates driving sustained levels of demand for communications and collaboration tools along with elevated usage rates for digital channels in work, school, social activities, and shopping settings.
While litigation just started in this case, BlackBerry (BB), which had sued Facebook in 2018 in a fight over messaging patents and was then countersued over patents for voice messaging technology, has said it has settled the disputes over patent royalties for terms that weren't disclosed, according to Bloomberg. BlackBerry spokeswoman Karen Clyne said in an email: "We have resolved our disputes pursuant to a confidential agreement and have no further comment." In Friday morning trading, BlackBerry shares were up as much as 17% in response. A Facebook spokesman said the company had no comment.
WhatsApp said, “We wish to reinforce that this update does not expand our ability to share data with Facebook.” Concerns stem from that Indian users not being provided the choice to opt out of data sharing with Facebook companies and that they are receiving less of a choice compared to the European Facebook users.