Facebook Shares Try to Fend Off Negative Reseach Reports

Facebook Inc. (NASDAQ: FB) is trying to trade up this Tuesday. There are two research notes which may get in the way, and it is important to know that Friday’s close of $18.06 is only a tad above the $18.03 post-IPO low. We are focusing on research calls from J.P. Morgan and from an Internet media research shop named eMarketer.

J.P. Morgan has maintained an Overweight rating on Facebook, but the firm lowered its price target on the stock to $30 from $45. This call sees ad revenue reaccelerating in the second half of the year. The firm also noted that nonadvertising revenue, such as payments, will be challenging for the next few quarters.

On Friday, a day when almost no one was in the office, we saw that eMarketer lowered the sales expectations for Facebook to $5 billion from $6 billion, as advertisers are not spending what they expected to spend for advertising on Facebook. The firm did note that this was still 36% growth. eMarketer is expecting some 31% revenue growth in 2013, and it sees revenue growth above 20% in 2014. The lower estimates are based on the notion that advertisers want to be able to see the real value in the Facebook ads. eMarketer’s Ezra Palmer said that he is actually not that concerned about mobile in the near-term.

So far this morning we are seeing a 0.9% rise to $18.22 in premarket trading, and the post-IPO range is $18.03 to $45.00.

JON C. OGG