Analysts Remain Bullish On Facebook Stock Amid Data Backlash

FB's 10-day put/call ratio has risen to uncommon levels

Mar 26, 2018 at 10:24 AM
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Facebook Inc (NASDAQ:FB) stock got crushed last week, but Canaccord Genuity is saying this pullback is a buying opportunity. The brokerage firm reiterated its "buy" rating and $240 price target, saying it doesn't believe advertisers will shun the platform in a meaningful way. However, this preceded news that Pep Boys is temporarily pulling its ads from Facebook.

FB shares so far are continuing their recent pullback, down 2.7% at $155.14. The equity has shed 16% since their March 16 close above $185, and in one respect is the cheapest it's ever been. That is, Schaeffer's Quantitative Analyst Chris Prybal noted Facebook's trailing price-to-earnings ratio is now the lowest it's ever been.

It would seem most analysts are following Canaccord's lead and maintaining their bullish outlooks. There are 29 brokerage firms with coverage on Facebook, and 27 say to buy. Meanwhile, the average 12-month price target stands up at $220.76. FB shares hit an all-time high of $195.32 back on Feb. 1.

As the stock has struggled on the charts, demand for FB options has exploded. For instance, the security's 30-day at-the-money implied volatility comes in at 44.1%, a fresh 52-week high. Traders have been taking an unusual interest in long put options in recent weeks, with the 10-day put/call volume ratio of 0.64 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) standing as the highest reading since early October.

 


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