Baird Defending Facebook Amid Ad Concerns, Says Trends More Stable Than AdParlor Data Suggests

Baird recommended investors buy Facebook Inc (NASDAQ: FB) shares on a pullback as it believes the intermediate and longer-term growth drivers remain intact.

Shares of the social media giant declined more than 2 percent after the company's ad partner AdParlor reportedly indicated a steeper-than-expected drop in sequential first quarter advertising growth on Facebook.

Related Link: Former Facebook Employee: Today's Stock Drop An 'Overreaction', Ad Spend Always Down QoQ In Q1

"While our Q1 checks have indicated some slowdown in March, overall we believe trends are more stable than this data point suggests," analyst Colin Sebastian wrote in a mid-day note.

The analyst noted his checks showed that most marketing partners are not concerned with the March slowdown, while January and February "started strong."

"Thus, while there may not be as much upside to consensus estimates as in prior quarters, we do not believe there is any structural issue," the analyst added.

The analyst, who reiterated his Outperform rating and $120 price target, noted there are significant share gains still available within core Facebook advertising, along with opportunities from the monetization of Instagram, Messenger, and WhatsApp.

Shares of Facebook recently traded down 2.1 percent at $108.26.