Instagram is central to continued progress at Facebook (FB +1.6%), KeyBanc says, expecting it to contribute the bulk of incremental ad revenue just two years from now.
The photo and video service will pass 1B monthly active users in the back half of this year, analyst Andy Hargreaves says, and ad revenue will double this year to $8.9B. "As core Facebook matures, Instagram is the key to the next leg of growth," he says. (h/t Bloomberg)
The service will drive 58% of incremental ad revenue by 2020, he writes.
Hargreaves has a price target of $245, implying 28% upside.
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