Analyst Targets Major Upside for Facebook Stock

Sentiment toward the FAANG stock is already upbeat

Nov 5, 2019 at 9:17 AM
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Facebook, Inc. (NASDAQ:FB) shares are trading modestly higher ahead of the bell, after Daiwa Securities upgraded the FAANG stock to "outperform" from "buy." What's more, the brokerage firm's $250 FB price target represents expected upside of 28% to last night's close at $194.72.

Most analysts are already bullish on FB stock, with 29 of 33 in coverage maintaining a "buy" or better rating, and not a single "sell" on the books. Plus, the average 12-month price target of $238.45 is a nearly 22% premium to current levels.

This bullish bias is seen in the options pits, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FB's 50-day call/put volume ratio of 2.31 ranks in the 84th percentile of its annual range, meaning calls have been bought to open over puts at an accelerated clip.

Drilling down to the past two weeks' worth of action, the weekly 11/8 195-strike and 210-strike calls saw notable increases in open interest. Data points to buy-to-open activity at the weekly options, indicating options traders are targeting even bigger gains by expiration at the close this Friday, Nov. 8.

Looking at the charts, Facebook stock bounced sharply off its 200-day moving average in early October, and has since gained 12.5%. The shares are now up 48.5% year-to-date, and within striking distance of their July 25 annual high of $208.66.


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