Facebook stock rises on mobile advertising optimism

03 JAN 2013

The share of advertising income Facebook makes via mobile is forecast to have almost doubled in its latest quarter, says JPMorgan Chase.

In a research note published yesterday, JPMorgan Chase upped its price target on the social network’s stock citing “strong advertising trends” – particularly in the mobile space where Facebook has previously struggled.

“We are incrementally positive on Facebook shares into 2013 as we believe it remains very early in the trajectory of Facebook’s mobile advertising,” wrote the JPMorgan analysts.

The bank expects mobile to account for 27 percent of Facebook’s advertising revenue in Q4, up from 14 percent in Q3. It predicts overall advertising growth of 49 percent in the quarter, which would be an increase on the 36 percent recorded in Q3.

Facebook is tipped to generate total sales of $6.69 billion in 2013, up 7 percent from an earlier estimate, and $8.24 billion in 2014, up 7.6 percent from the prior estimate, according to the note.

According to Bloomberg, Facebook shares rose 5.2 percent to close at $28 in New York yesterday. JPMorgan has set a target price of $35.