Tuesday, February 12, 2013

Facebook (FB) Cut by Bernstein to Market Perform

According to Forbes, Bernstein downgraded Facebook (FB) to market-perform after the close on Monday (2/11).  It reduced its FB valuation to $27/sh from $33/sh.  The article can be accessed directly from here: http://www.forbes.com/sites/ericsavitz/2013/02/11/feeling-asocial-bernstein-cuts-facebook-to-market-perform/

We note that a couple of the concerns that we mentioned at the end of Jan. were included in Bernstein's analysis on Monday: early 'impressive' growth in mobile ad revenues could be misleading; there is evidence of continuing pricing pressure from mere modest growth in price per ads even though the FB platform for ads is hyped as the one with highest potential return; and lack of enough evidence that revenues and profitability from emerging markets will grow fast enough to at least partially offset what appears to be not significant enough growth in the developed markets (North America and Europe).  

Lastly, although it is considered 'old news', Stifel Nicolaus downgraded FB on 1/31.  

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