Facebook: Struggling ahead with second-quarter earnings in sight


The Tokyo 2020 Olympics are in full swing and the world’s athletes are taking turns trying to accomplish near-impossible sporting feats, break personal records, and write their names in the history books.

But titans from an entirely different universe will also line up to beat expectations this week, with big tech giants reporting second-quarter finances. Mark Zuckerberg might not be known for his athletic prowess, but Monness’ Brian white think of Zuck’s Facebook (full board) is set to win against the street when the company reports second-quarter earnings on Wednesday (July 28 am

White expects Facebook to “beat” its 2Q21 revenue projection of $ 28.10 billion, a 50% year-over-year increase, while beating Street’s forecast of $ 27.86 billion. The analyst believes that FB will “meet” its EPS estimate of $ 3.31; Street has $ 3.03.

That said, although the forecast calls for a 7% quarter-on-quarter increase in sales, it is below the four-year average rally of 11% for the final quarters of June.

White’s estimates for the third quarter are also above Street’s, with anticipated revenue of $ 29.01 billion versus $ 28.22 billion, while EPS of $ 3.19 is higher than the consensus estimate of $ 2.94.

Facebook is not a company that rests on its laurels and, at the same time, is constantly embroiled in one controversy or another. 2021 has been no different so far.

For the latter, lawmakers investigating Big Tech appear ready to move on. Despite Facebook dismissing a recent antitrust lawsuit, White expects the company and its Big Tech brothers to come under increasing scrutiny in the coming months.

Regarding the former, this year Facebook “has moved forward with new initiatives designed to expand advertising in more parts of the platform, launched new innovations to drive greater participation, better support for creators and introduced new shopping experiences.”

A notable announcement in the quarter concerned the upcoming launch of Stores on WhatsApp, while White also highlights the resurgence of the digital advertising market, which “has rebounded strongly from cycle lows in 2Q20.” This positions Facebook to “benefit from better ad spend and capitalize on accelerated digital transformation with new initiatives.”

All of which results in White repeating a Buy on FB shares along with a $ 460 price target. Investors could be sitting with 23.5% profit, should White’s thesis develop accordingly over the course of the next 12 months. (To see White’s history, Click here)

Overall, Facebook currently has 33 analysts tracking your progress, of which 28 suggest Buy, 4 say Hold and 1 implore Sell, all together merging into a consensus rating of Strong Buy. The forecast is for the shares to appreciate a modest 7% in the coming year, given that the average price target is currently $ 394.52. (See analysis of Facebook shares on TipRanks)

To find good ideas for trading stocks with attractive valuations, visit TipRanks’ Best stocks to buy, a recently released tool that ties together all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.



Source link

Leave a Comment

x