There’s actually someone on Planet Earth, who actually thinks Facebook Inc(NASDAQ:FB) is a valuable company – someone, other than Mark Zuckerberg, that is.
J.P. Morgan analyst Doug Anmuth holds the view that Facebook will be worth $30 a share soon — about 66 percent more than the battered stock is trading at this morning.
Facebook shares have lost half their value since their debut in May, in a botched-up IPO, at $38 a share.
Anmuth’s price target is still much lower than what his original price target at $45 was when he had recommended the stock on June 27. But, its still higher than what anyone else in the market is willing to give it.
In a report published this morning, the analyst indicated that he was still bullish on the social network, with an “overweight” rating.
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A good reason for Anmuth’s upbeat outlook is that he is unfazed by the relentless selling of Facebok shares that the expiry of lockup takes place in phases.
He thinks Facebook’s Chief Financial Officer Davind Ebersman will be making a $2.2 billion “de facto share repurchase,” which will take about 120 million shares off the market.
The most critical part of Anmuth’s bull case is that he is convinced about Facebook’s ad strategy, which he feels is working and will yield more revenues in the future.
He has raised his ad revenue estimate for the social networking site and expects that revenues from mobile ads will touch $1 billion by the end of 2013.
Anmuth has forecast that Facebook will be generating operating profit of $4.2 billion in 2014. And if the company gets back to $30 a share, that would mean Facebook would trade at the same 15x multiple investors assign to Amazon, he notes.