Morgan Stanley Sees Potential In Instagram eCommerce Future, Raises Facebook Target

Analysts at Morgan Stanley see a bright eCommerce future for Instagram and have raised the price target on Facebook stock, according to reports.

Facebook shares rose 2.06 percent early Tuesday (April 9) to $178.54. The shares are up 29 percent year-to-date.

Morgan Stanley has set its new price target at $195 a share, which is up $5. The target is 11 percent above the current level.

“Instagram commerce is top of investors’ minds,” Morgan Stanley analyst Brian Nowak wrote. “We are bullish on Instagram’s commerce opportunity.”

Nowak thinks the eCommerce strategy Facebook wants to get going on Instagram advertisements will add $4 billion of revenue in 2021.

“We see large and small brands/retailers leveraging Instagram’s leading reach, data, and ‘browsing/aspirational’ behavior to grow their online businesses.”

Nowak said advertisers could potentially be willing to pay up to 10 percent commission on sales from click-through ads. That would give them an estimated 10-times return on ad spending. Most advertisers only see a 3 to 6 times return.

Nowak also said that “the commerce opportunity isn’t likely to be fast or easy either,” because Facebook needs to figure out its payments platform, which would help to facilitate the purchasing aspect of the site. That way, Facebook would be able to “more directly link ad dollars to transactions.”

Ross Sandler, a Barclays analyst, said Facebook Coin revenue could reach $21 billion by 2021.

In other Facebook news, hundreds of millions of Facebook user records were exposed on cloud servers and publicly visible, according to reports.

Security firm UpGuard posted about the news on April 3.

“The UpGuard Cyber Risk team can now report that two more third-party developed Facebook app datasets have been found exposed to the public internet,” the post said.

“One, originating from the Mexico-based media company Cultura Colectiva, weighs in at 146 gigabytes and contains over 540 million records detailing comments, likes, reactions, account names, FB IDs and more. This same type of collection, in similarly concentrated form, has been cause for concern in the recent past, given the potential uses of such data.”