These Analysts Are Buying Facebook On Any Dip

• Shares of Facebook Inc (NASDAQ: FB) has appreciated 28.72 percent year-to-date, reaching a high of $104.88 on October 29.
• Brean Capital’s Sarah Hindlian has maintained a Buy rating on the company, with a price target of $111.
• Hindlian expects the company to post a slight upside to its 3Q15 results. Hindlian also recommends buying the stock on any pullback while maintaining the stock a top long-term pick.

Analyst Sarah Hindlian expects Facebook to post its 3Q15 results 1.5 percent above the consensus forecasts when it reports its earnings on November 4.

Hindlian also stated that the worsening environment during the quarter was offset by “strong video & carousel ads, ongoing budget shifts to digital/ social, as well as Instagram’s ramp.”

Related Link: Why Facebook Is Worth $105 Heading Into Earnings

In addition, Hindlian said that she remained bullish on Facebook’s fundamentals and “the potential of its ramping products, including Instagram, WhatsApp, Oculus Rift, and Messenger,” while recommending caution, given the premium stock valuation, rising expectations and unfavorable FX environment.

Hindlian also expressed concern regarding the uncertainty surrounding the company’s initial expense guidance for FY16.

Although the company has posted upside to the consensus ad revenue forecasts for the past five consecutive quarters, the magnitude of the beats have been declining, partly due to the tough FX environment. However, the FX environment has improved quarter to date during 4Q15.

“We expect Facebook to provide some early color on its cost growth trajectory, though we believe that Facebook is wisely investing into its infrastructure and products,” the Brean Capital report said, while mentioning that given that Facebook has been lowering its initial expense guidance every quarter, its early outlook for FY16 could be “overly conservative.”

With regard to the valuation, the report stated, “Though premium, we believe Facebook's best in breed targeting, global reach, and substantial user base justify such valuation.”