Buy Pummeled Facebook Stock on the Dip, JPM Says

Despite wretched publicity and talk of a regulatory crackdown, the company is resilient, an analyst argues.


Whistleblower, hah! Facebook stock has taken a pasting lately amid increased congressional scrutiny and a whistleblower’s testimony that the social network was inflicting harm on society.

But JPMorgan is suggesting that investors buy on the dip. While some Facebook advertisers may be scared away by all the controversy, there are enough others ready to fill any gap, the firm says in a research note. “FB’s ad platform consisting of more than 10 million advertisers is extremely resilient and although some marketers may want to shift spend away or reduce bid levels at certain times, we believe there are plenty of others who are eager to capture that inventory,” JPM analyst Doug Anmuth wrote, using the stock’s ticket symbol, FB.

Over the past month, Facebook’s share price has dropped 11.4%, to $333, as of Wednesday’s close. It’s down a bit this morning, despite a market rally. JPM’s target price for the stock is $450 per share over the next year.

No doubt, Facebook will face more flak ahead that may pressure its shares, as bipartisan critics in Congress urge a government crackdown on the company. In congressional testimony and a complaint to the Securities and Exchange Commission (SEC), former Facebook staffer Frances Haugen has charged that Facebook was aware of how organizers of the Jan. 6 Capitol riot employed its platform; was ineffective at axing hate speech; and let Instagram make teenage girls’ body-image issues worse.

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