Facebook’s shares have jumped this morning after J.P. Morgan analyst Doug Anmuth wrote in a research note that he is “incrementally positive” about where the company is heading in 2013. Anmuth said that ?marketer feedback on mobile and news feeds ads has been positive.? Anmuth added that he is encouraged that Facebook is able to leverage third-party data to drive improvements to desktop ad performance. He also added that Facebook’s ad revenues will accelerate at least through Q1 and he has raised 2013 and 2014 ad revenue estimates by 6%-7%.
Anmuth said that ad revenue growth is expected to jump up 52% in the first quarter from 49% in the fourth quarter. Anmuth is maintaining an Overweight rating on Facebook’s shares and he lifted the price target to $35 from $29. The company’s Q4 EPS forecast is expected to jump to 19 cents a share from 15 cents. This boosts his 2012 outlook to 56 cents from 52 cents. And Anmuth is expecting the outlook for 2013 to be 69 cents, up from 59 cents. The 2014 forecast is at 86 cents from 73 cents.
Anmuth pointed out that Samsung Mobile used Facebook ads during the launch of the Galaxy S III smartphone launch. The company generated around $129 million in sales attributed to Facebook. This delivered “an ROI of 13x on Samsung’s $10 million of Facebook ad spend.” Pepsi has also been positive about Facebook’s ads. Wal-Mart has increased their ad spending on Facebook too.