- Showing the kind of bullishness he often exhibits towards Apple, Piper's Gene Munster (Outperform rating) has hiked his Facebook (FB +1.6%) target by $28 to $120.
- Munster cites Oculus' growth potential. "Over the next 10 years, we expect a shift in the way that humans interact with machines from smartphones and PCs toward wearables and integrated electronics that enable virtual reality and augmented reality. We believe FB is the best play on the next computer paradigm of virtual reality ... Big picture: Oculus is a valuable insurance policy, and gives us greater confidence in Facebook’s ability to sustain usership and revenue growth."
- His new target translates to a steep 2016E EV/EBITDA multiple of 34x. It arrives 11 days after Oculus unveiled its first commercial Rift model, as well as handheld motion controllers and a partnership with Microsoft to stream Xbox One games to the Rift via Windows 10 PCs.
- Separately, Facebook product chief Chris Cox has told the WSJ his company will show off new/more immersive mobile ad formats at the Cannes Lions ad festival, which starts tomorrow. Cox: “You’re starting to see a lot of new interactions [on mobile]… We’re trying to spend a moment looking at some of these trends and imagining what they’ll look like in next few years.”
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Last week: RBC talks up Facebook's video ad potential