Wall Street Weighs In Bullishly on Facebook Inc, Groupon Inc

Social media stocks Facebook Inc (NASDAQ:FB) and Groupon Inc (NASDAQ:GRPN) have outperformed lately

Aug 18, 2016 at 10:39 AM
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Evercore ISI has weighed in on a number of social media stocks. While Twitter Inc (NYSE:TWTR) was hit with a downgrade, Facebook Inc (NASDAQ:FB) and Groupon Inc (NASDAQ:GRPN) were luckier. Let's take a closer look at the analyst notes that've been handed out to FB and GRPN.

Evercore ISI raised its price target on Facebook to $160 from $155, representing record-high territory for the shares. The stock is currently off 0.2% at $124.07, but touched an all-time peak of $128.33 as recently as July 28. Year-over-year, FB has been an absolute beast on the charts, advancing more than 30%.

Not surprisingly, optimism has hit fever pitch on the social media stock. Over the last four weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open twice as many calls as puts on FB. Echoing this, 28 of 30 analysts rate Facebook Inc a "buy" or better, versus two "holds" and not a single "sell." At the same time, short sellers have been turning tail, with short interest plummeting 11.6% during the latest reporting period, and accounting for less than 1% of the stock's float.

Turning to GRPN, the shares were last seen 0.5% higher at $5.62, benefiting from a price-target hike to $5 from $4 at Evercore ISI. Separately, Piper Jaffray reiterated its "overweight" rating and $6.50 target price, writing that recent travels with Groupon's executive team has the brokerage firm "increasingly bullish on the company's efforts in narrowing its focus on geographies/products/services in which it can succeed."

On the charts, the stock has been red-hot of late, after bouncing between $3 and $3.50 for most of June and July. Most of these gains can be traced to a post-earnings bull gap late last month. If this trend continues, Groupon Inc could benefit from even more positive analyst attention. After all, three-quarters of covering brokerage firms rate the social media stock a "hold" or a "strong sell."

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