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Facebook's Stock Rally Takes Wall Street by Surprise

Analysts fail to keep pace with the social network’s surging shares
Facebook's Stock Rally Takes Wall Street by Surprise
Photograph by Joel Saget/AFP via Getty Images

Wall Street analysts are racing to catch up with Facebook’s stock rally. Shares of the world’s biggest social network have jumped 28 percent so far this year through March 11, compared with a 1 percent gain for the Standard & Poor’s 500-stock index. The upward move has put the 49 analysts who cover Facebook in a bind: While 38 recommend the company with the equivalent of a buy rating, 16 of them have share-price targets below where Facebook is trading, according to data compiled by Bloomberg.

Analysts’ average 12-month price target for Facebook is $72.92, less than 1 percent above the company’s March 11 closing price of $70.10. With the stock advancing more rapidly than anticipated, the targets—many of which have been calculated since the start of the year—look out-of-date. “Facebook stock has just ripped past expectations,” says Richard Greenfield, an analyst at BTIG in New York, who in October recommended buying the shares with a $68 target over the next 12 months. At the time, Facebook was selling for $49. “We’re very happy with our rating upgrade to buy, but it has all happened superfast,” he says. He hasn’t changed his price target.