JPMorgan Sets $161 Price Target On Facebook, Highest On The Street

Facebook Inc (NASDAQ: FB) reported robust 1Q results, while maintaining its cash open growth guidance for 2016.

JPMorgan’s Doug Anmuth reiterated an Overweight rating on the company, while raising the price target from $136 to $161.

“FB remains in a class by itself across the combination of scale, growth, & profitability,” Anmuth mentioned.

1Q Results

The company reported 63 percent year-on-year growth in FXN ad revenue, while non-GAAP operating margins expanded 55.2 percent year-on-year.

Engagement numbers were robust with DAU/MAU coming in at 66 percent and total time spent on Facebook, Messenger and Instagram at 50 minutes per day.

Related Link: We're Still In The Early Stages Of Facebook's Monetization

Despite the 41 percent year on year increase in expenses in 1Q, Facebook maintained its cash opex growth guidance for 2016 at 45–55 percent.

According to the JPMorgan report, “While there are broader concerns of macro softness toward the end of 1Q, Facebook isn’t seeing them.”

Anmuth believes that apart from normal seasonality, the key drivers of strength in 4Q persisted into 1Q, with retail continuing to be a robust ad category.

Class C Shares

“FB’s proposed Class C share structure is nearly identical to what Google (Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG)) implemented a couple years ago & is based on FB/Mark Zuckerberg’s focus on running the company for the long-term,” Anmuth said.

The analyst expects only modest pushback, with concerns regarding Mark Zuckerberg selling shares down and Facebook potentially raising its M&A activity, without diluting Zuckerberg’s voting control.