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Shares of Facebook (NASDAQ:FB) wasted no time in Monday’s shortened trading session and closed up 2.55 percent. Investors may be taking advantage of temporarily low prices — shares dropped last week, breaking a three-month rally that has pulled the stock more than 26 percent higher — and building a position in the stock before volume returns after the Christmas break. The reason? Growing suspicion that Facebook may outperform Wall Street’s fourth-quarter and fiscal-2013 expectations.
In the middle of last week, Cantor Fitzgerald raised its price target on Facebook from $28 to $33 and held its “Buy” rating. The firm reportedly cited growing mobile-user engagement in November, and increased monetization of that mobile traction.
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The analyst also indicated Facebook’s status as a major player in the e-commerce game as a reason to play the stock in the long-term. This type of reasoning is relatively new but not uncommon or unfounded, given Facebook’s transparent initiatives in the area. The Facebook Gifts feature was rolled out recently, and estimates based on test results suggest it could generate revenues between $127.5 million and $1.02 billion per year.
King under the e-commerce mountain, Amazon.com (NASDAQ:AMZN), has begun Friends and Family Gifting, which allows users to set shopping reminders for people they want to buy gifts for and find their wish lists on Amazon. While not directly pulling sales through Facebook, it strengthens the relationship between the social network and the user’s wallet. The stronger that tie, the better for Facebook, and the closer it gets to Google (NASDAQ:GOOG) in the race for display-ad dollars.
On Monday, pivoting off its gains in e-commerce and mobile monetization, Needham analyst Laura Martin also decided that Facebook was worth $33 per share. Martin increased her 2013 revenue forecast from $6.5 to $6.7 billion with a new EPS of $0.65, a gain of six cents, citing, among other things, mobile monetization…
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