FB, Daily
Facebook report second quarter earnings after the close of the US session later today. Never short of a headline or two, a poll of analysts by Reuters suggests the social media behemoth will report earnings per share of $1.72, up a very significant 30% from $1.32 from a year ago. 43 of the 46 analysts in a Reuters poll have a Buy or Strong Buy recommendation for the stock with a median target of around $233.00. Facebook close up yesterday at $214.63.
The second quarter was the most contentious in the company’s history following the massive data-harvesting scandal via Cambridge Analytica, with the CEO dragged in front of law makers on both sides of the Atlantic in a tepid apology tour, a rapid re-branding and huge investment in safety and security. The stock is up close to 17% year to date and over 40% from the March lows (sub $149.50) following the Cambridge Analytica revelations. “FB has reported revenue above consensus in each of the last 12 quarters, beating expectations by an average of 4% ($250-$300mn),” Goldman Sachs analyst Heather Bellini pointed out in a report published Monday. She sees potential for similar outperformance this quarter and looks to Instagram, Messenger and WhatsApp to show strong growth fueled by increased advertising revenues.
Technically, Facebook remains in a strong bull rally, the 20 period moving average on the Weekly chart was breached in early May at $186.84 and on the Daily chart this key moving average has held from early July, with support at $203.20 and $192.50.
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Stuart Cowell
Head Market Analyst
HotForex
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