The Evercore ISI team highlights a 'mismatch between perception and reality with respect to the importance of big brands' spend,' but a BMO analyst says it is becoming 'more expensive to operate 'open' social media.'
The Evercore ISI team highlights a"mismatch between perception and reality with respect to the importance of big brands' spend," but a BMO analyst says it is becoming"more expensive to operate 'open' social media."
Zuckerberg has remained firm though that Facebook will not regulate online speech. But as the ad boycott started to gain momentum, Facebook said that it would flag "newsworthy" posts from politicians and political groups that break its rules, including those from Trump, as well as ban posts that discourage voting with false claims.
The Evercore ISI team also argued that the novel coronavirus pandemic may really be behind the ad spending cuts. "Call us a bit cynical, but the current brand boycott seems like an opportunity for PR among advertisers already looking to reduce spend amidst a weak macro environment," the wrote. "As such, we don’t think there will be a material reallocation of budgets to other platforms in the second half of 2020.
"For tactical investors, a move to the sidelines is a likely outcome in the immediate future," the Evercore ISI analysts said about the outlook for Facebook shares. "For investors focused on a horizon measured in months and years rather than days and weeks, there should be little reason to reconsider their investment thesis." The analysts have an "outperform" rating and $280 price target on the stock.
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