Morgan Stanley Comments On Facebook's F8 Conference, Says 'A Lot To Be Bullish About'

In a report published Friday, Morgan Stanley analyst Benjamin Swinburne stated that Facebook Inc (NASDAQ: FB) has a unique position to best capture the mobile ad opportunity as the company signaled during its F8 conference that it is putting more "building blocks in place."

Swinburne argued that in order to drive his bull case, Facebook needs to evolve over time into the dominant mobile ad platform for advertisers and publishers. By developing Facebook Audience Network (FAN) and acquiring LiveRail and Atlas, the company is "plugging existing platforms in a very competitive ad tech landscape."

However, the analyst continued that the company has built an ad business with "fairly minimal benefit" thus far from leveraging off Facebook inventory and that even FAN and Custom Audiences, which utilize its 1.4 billion users' data for targeting are still relatively new drivers.

Swinburne also commented on Messenger, noting that Facebook is building the platform into a "broader communications tool" that has clear long-term ad monetization potential.

Bottom line, FAN and LiveRail is an "incremental positive" to the analyst's bullish thesis, where upside to an already robust revenue growth expectations and healthy incremental margins over time are expected.

Shares are Overweight rated with a $90 price target.