Facebook Climbs to to Record High on Citi Upgrade
Facebook Inc. (FB), operator of the world’s most popular social-networking service, climbed as much as 5.2 percent to a record after an analyst at Citigroup Inc. upgraded the stock to a buy, saying growth is “sustainable.”
Shares advanced 4.6 percent to $49.35 at 11:38 a.m. in New York, and earlier touched $49.66. The new high marks another milestone for a stock that lost half of its value in the four months following a May 2012 initial public offering.
Facebook’s latest earnings results in July marked a turning point, assuaging investor concerns over the company’s ability to make money as users shifted their activity to wireless devices. Chief Executive Officer Mark Zuckerberg has boosted efforts to attract consumers and advertising dollars to Facebook’s services on smartphones and tablets, where promotions are interspersed with updates and photos. Mobile made up 41 percent of advertising revenue in the second quarter, up from 30 percent in the previous period.
“Following several conversations with advertisers and agencies we believe the factors driving the sudden inflection and growth in the second quarter are sustainable and that there are a number of factors that should contribute to further growth and gains, and potential upside,” Mark May, an analyst at Citi Research, wrote in a report. He also raised the target price to $55 from $32.
The Menlo Park, California-based company has spent more than a year rolling out advertising products aimed at reaching consumers on mobile devices. Facebook, which has more than 1 billion members, has also worked to simplify the ad-buying process for marketers.
Facebook, which has a market capitalization of more than $120 billion, has surged more than 80 percent since reporting that sales of promotions on wireless devices are on track to surpass revenue from desktop computers.
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