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Facebook Shares Gain on Rating Upgrade from Raymond James; All Eyes on Q4 Results (FB)

Shares of social networking giant Facebook Inc. (NASDAQ: FB) have risen sharply in trading today following a rating upgrade from Raymond James.

Aaron Kessler, analyst at Raymond James, upgraded Facebook shares from Market Perform to Outperform rating. Kessler set a price target of $38 on FB. In his research note to clients, Kessler said that recent checks with Facebook ad partners indicate strong advertiser demand for mobile, news feed and FBX. The analyst expects mobile advertising revenue to account for around 26% of the FB’s total ad revenue. In the third quarter, the social network had reported that mobile advertising revenue accounted for 14% of its total advertising revenue. In 2013, Kessler expects mobile advertising revenue to exceed 30%.

The rating upgrade from Kessler comes just ahead of Facebook’s fourth-quarter earnings announcement. The social network will release its quarterly results on Wednesday, January 30, 2013.

Sterne Agee analysts today said they expect Facebook to report strong fourth-quarter financial results. The analysts expect a 75% increase in fourth-quarter mobile revenue on a sequential basis.

In a research note to clients, Sterne Agee analysts Arvind Bhatia and Brett Strauser wrote that they continue to believe Facebook should be a core holding Internet portfolios. The analysts believe that the social network is well-positioned to benefit from two secular trends in advertising—the shift from off-line to on-line advertising and the increasing importance of a social context in on-line advertising.

Facebook shares rose to an intra-day high of $32.50 earlier today. At last check, FB shares were trading 2.73% higher at $32.40 on volume of 33.12 million. In the last three months, FB shares have gained nearly 48%. The stock is still trading below its May 2012 IPO price of $38.


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