Facebook Keeps Climbing: Are the Bulls Being Too Aggressive?

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Facebook (NASDAQ:FB) shares have almost fully recovered from March’s selling pressure, as the stock now approaches all-time highs. Much of Facebook’s valuation is tied to future expectations and hopes of better monetizing its near-1.3 billion monthly active users with video advertisements and payment processing, as well as by driving higher its average revenue per user on the advertising front. Yet, with a market capitalization of $165 billion, there are still many analysts who believe Facebook shares can go even higher.

Analysts have been particularly bullish on Facebook in the last couple of weeks. Sterne Agee made one of the more bullish Facebook calls that we’ve seen to date, with an $80 price target and expectations for $30 billion in revenue by 2018. Clearly this is looking way into the future and assuming that all of the company’s dominos will fall in place.

Sterne’s bullish outlook rests on the belief that Facebook will eventually command 13 percent of all global digital advertising, a market currently controlled by Google (NASDAQ:GOOG)(NASDAQ:GOOGL). However, Sterne doesn’t believe that Facebook’s core platform will be the only contributor, looking at better monetization of Instagram, WhatsApp, and its Messenger application.