Facebook Inc (FB), Twitter Inc (TWTR) and Google Inc (GOOGL) highlight the stocks getting new analyst coverage on Monday, as Morgan Stanley weighed in on each of the high-flying tech stocks.
As three of the most widely watched names in the stock market today, investors should keep a finger on the pulse of these three companies, which have a combined market capitalization of about $615 billion.
Facebook Inc (FB)
Facebook stock is up more than 35% so far in 2014. But Morgan Stanley thinks the Menlo Park-based social media giant has plenty more room to run. The Wall Street research firm initiated coverage of FB stock today, giving it a $90 price target and an “overweight” rating. The $90 price target implies 20% upside for FB stock from Friday’s closing price.
Analysts in general are fairly bullish on Facebook: Stifel, UBS, and Needham each have “buy” ratings on FB stock, with price targets ranging from $93 to $99.
Twitter Inc (TWTR)
Morgan Stanley also initiated coverage on one of Facebook’s biggest rivals, Twitter. TWTR stock hasn’t enjoyed quite the same returns that FB has in 2014. In fact, TWTR is off more than 35% in 2014 as Wall Street worries about the company’s ability to monetize consistently and grow rapidly into the future. Morgan Stanley’s incredibly lukewarm “equal weight” rating on Twitter shares, combined with a $42 price target that implied just 1.3% upside for TWTR stock didn’t impress investors.
Although Twitter beat or matched earnings and revenue expectations in the third quarter, it wasn’t enough for Wall Street, which sent the stock about 10% lower as forward revenue guidance didn’t tickle its fancy.
Google Inc (GOOGL)
Shares of search engine giant Google were also given an “equal weight” rating by Morgan Stanley. There are two widely held classes of Google stock: Google Class C (GOOG) and Google Class A (GOOGL). There are a number of differences between the two classes, but all you really need to know is that GOOGL — which gives shareholders one vote per share — trades at a slight premium to GOOG, which does not carry voting rights.
Morgan Stanley’s rating today applied to GOOGL stock (the higher-priced of the two), which makes the $600 price target even less gaudy. The $600 level represents just a 5.7% upside from Friday’s closing price. Facebook was directly cited by the research firm as a competitor that Google needs to fend off if it hopes to keep its enviable 14% market share in advertising.
As of this writing John Divine was long both GOOG stock and GOOGL stock. You can follow him on Twitter at @divinebizkid.
