Morgan Stanley says Facebook is a top stock pick
Summary
Morgan Stanley analysts said in a Friday note that Facebook remains the top pick among large-cap social media stocks, with its investments and monetization efforts offsetting any near-term engagement drop-offs as the coronavirus pandemic nears an end. "We remain most positive on FB within the large cap social media names as we see their leading ROI, product innovation, and monetization call options (Reels, Marketplace, Shopping, etc) enabling them to navigate through difficult near-term engagement headwinds," the firm said. Morgan Stanley also sees Facebook driving ad growth, helping the social media giant with a potential drop-off in engagement. "We also note that even a slight increase in News Feed ad load could offset any engagement decline. In our view, the extent to which FB can deliver on topline can lead to $16+ of free cash flow per share next year, painting a path toward our $440 bull case (~30% upside)," the analysts said.