A flood of Wall Street analysts are raising their price targets for Facebook, predicting that shares of the social-media giant could easily surge more than 10 percent to $200.
Shares of Facebook (FB) recently traded at about $177.51.
To be sure, InvestorPlace Media explains that Facebook “proved that it's the stickiest platform in the world. Amid the worst data privacy scandal arguably ever, the company added users, grew its advertisers base, and maintained 30%-plus revenue growth.”
InvestorPlace sees a handful of reasons that shares will continue to rise, such as tremendous growth potential in under-developed economies, the return of revenue growth and Instagram's potential e-commerce expansion.
Seeking Alpha cited a host of analysts predicting a continued Facebook stock rally: Guggenheim raised it target from $175 to $200; Morgan Stanley raised from $190 to $195; and Mott Capital stated a price target close to one Seeking Alpha analyst’s revised forecast of $200.58.
However, one of the biggest possible drags on the stock price isn’t going to just fade way, Reuters reported.
Facebook has bowed to pressure from the European Commission and consumer authorities by revising its terms, making it clear what it does with users’ data and taking responsibility when data has been mishandled by third parties.
The world’s largest social network is under fire on both sides of the Atlantic over a number of privacy-related issues that have exposed the passwords of millions of users.
The European Commission said the changes in comprehensive and plain language mean users will now see how Facebook uses their data to develop profiling activities and target advertising to finance itself.
“Now, users will clearly understand that their data is used by the social network to sell targeted ads,” Commission Justice Commissioner Vera Jourova said in a statement.
The company will only unilaterally change terms and conditions where the changes are reasonable and will keep content deleted by users only when requested by enforcement authorities and up to 90 days.
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