Facebook Buy Button Boost? SunTrust's Peck Sees It Potentially Adding 5-10% To Incremental Revenue

Robert Peck of SunTrust Robinson Humphrey maintained a Buy rating on Facebook Inc (NASDAQ: FB) Thursday, along with a price target of $100, unchanged from his previous research coverage.

Facebook closed at $82.16 after Wednesday’s session and spiked up 15 cents to $82.31 in Thursday’s pre-market session.

Facebook announced on Wednesday that it will be launching a brand new feature: the “Buy Button.” The buy button will give Shopify clients from various businesses the ability to build advertisements that grant transactions with one click of a button.

Related Link: What's Next For Facebook And Oculus?

“We think this new buy button could not only expand the activity of current retail/ecommerce advertisers but also open a new segment of advertisers that are more ‘direct response’ e-commerce companies," Peck explained. The button could boost incremental revenues by 5 to 10 percent, he added.

His reasoning for the calculation?

"If we assume the Buy Button ads can achieve a ~30% lift in "effective CPMs" and that 10-30% all impressions are ecommerce related, then we think that Facebook could see an incremental lift to revenues of 5-10%."

Facebook’s stock price is up almost 28 percent in the past year.