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Deutsche Bank analyst Ross Sandler has reaffirmed his Buy rating and $115 price target on Facebook Inc.
The analyst has lowered his revenue estimate for the company’s third quarter of fiscal year 2015 by 1%. The analyst also said that Facebook-owned Instagram is growing in popularity against Facebook itself.

Currently, the consensus mostly maintains a bullish stance on Facebook; of the 56 analysts currently providing ratings, 49 represent bulls, while six analysts rate it a Hold. Sandler still says he expects a modest upside to his revenue estimate for 3QFY15, thanks to the growth in ad revenue. He mentioned that 60% of 18 to 24 year old US population is using the app approximately 10 times a day. Sandler further adds the company is unlikely to give operating expenditure guidance for 2016, but still remains in heavy investment mode. Even though the company’s launch of Instagram Application Programming Interface (API) partner and self-serve ad in August were positive signs, Mr.

He is of the opinion Facebook will later guide operating expenditure somewhere within the 50% to 55% range, by January. However, in the bigger picture, he sees opportunity for both Whatsapp and Messenger, as having $10 billion worth of incremental sales by 2020.
The analyst also adds that Oculus would be 3% to 4% additive to the revenue for FY16, due to associated content purchases and 1.5 million units.

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