Facebook spending gets thumbs up from analysts - if not investors
By Tenzin Pema and Supantha Mukherjee
(Reuters) - Another day, another quarterly report from a technology company that disappointed investors.
Facebook Inc's shares fell as much as 7.4 percent to $74.78 in early trading on Wednesday, a day after the company revealed aggressive spending plans for 2015.
But analysts were taking a more upbeat view, saying the heavy spending will drive long-term growth and reinforce the social networking giant's market dominance.
No brokerages cut their recommendation on the company following the release of its third-quarter results, and several said the price decline represented a buying opportunity.
At least 15 brokerages cut their price targets on the stock, by as much as $8 to as low as $78, mainly to reflect the company's expense and revenue outlook.
"FB delivered another strong quarter and is very well-positioned in an increasingly mobile and social internet landscape, and to be clear, FB is investing into strength and future growth opportunities," JP Morgan Securities analysts said in a research note. JP Morgan rates Facebook "overweight", with a price target of $85, down from $90.
Of 44 analysts covering the stock, 15 rate it a "strong buy," 22 a "buy" and seven a "hold." Nobody rates the stock a "sell", according to Thomson Reuters data.
The drop in Facebook's share price follows a now-familiar script this corporate reporting season. Continued...