The FAANG Stock Expected to 'Outperform' in 2018

Needham, Paul Meeks expect Facebook to rally higher next year

Managing Editor
Dec 12, 2017 at 10:00 AM
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Brokerage firm Needham said FAANG stock and social media powerhouse Facebook, Inc. (NASDAQ:FB) will remain one of its top stock picks in 2018, reiterating a "buy" endorsement and $215 price target -- in uncharted territory for FB stock. Further, notable tech investor Paul Meeks said he expects FAANG stocks to "continue to outperform" over the next year, regardless of the overall market climate, and opined that FB and Google parent Alphabet Inc (NASDAQ:GOOGL) are attractively priced right now.

Nevertheless, shares of FB were last seen down 0.3% at $178.35. After touching a record high of $184.25 on Nov. 28, the security pulled back with tech stocks, but found support atop its 80-day moving average. In fact, Facebook stock has scarcely dipped below this trendline since early January, and is up nearly 55% on the year.

Options traders are leaning toward the bulls' camp on Facebook stock. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows FB with a 10-day call/put volume ratio of 2.18, ranking in the 76th percentile of its annual range. This suggests calls have been bought over puts at a faster-than-usual clip during the past two weeks, as speculators predicted a rebound for the shares.

Even before today's analyst and investor attention, the brokerage crowd was also optimistic toward the FAANG stock, with all 27 analysts following the stock carrying "buy" or "strong buy" recommendations. With Wall Street already deeply in FB's corner, this leaves very little room for further upgrades to attract fresh buyers to the table.


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