Morgan Stanley analysts said on Friday that Facebook remains the top pick among large-cap social media stocks, and as the pandemic draws to a close, its investing and monetization efforts will reduce engagement in the near term. Said to compensate.

“Looking at their key ROIs, product innovations, and monetization buying options (reels, marketplaces, buying, etc.) that allow them to overcome short-term engagement challenges, we’re great. . It is the most active social network name for FB, ”the company said.

Morgan Stanley also believes Facebook is driving ad growth and helping social media giants overcome barriers to short-term engagement.

“Also keep in mind that even a slight increase in the feed ad load can offset the drop in engagement. In our opinion, FB will be able to offer premium hedging of over $ 16 per share next year. This could lead to a net cash flow of $ 440 towards a bullish case of $ 440 (up about 30%). “

When the Covid-19 pandemic limit is lifted, people can spend less time on social media. The company said that lower social media use and engagement will lead to greater importance for innovation and ad pricing / ROI. This will drive advertising growth and allow businesses to exceed estimates this year and later next year.

According to analysts, “Social platforms can continue to develop products that drive engagement and provide a measurable advertising return on investment that directly links ad spend to transactions (social purchases, short videos, cards, etc.). It will be important. “This is not a new dynamic, but it is becoming increasingly important to meet or exceed the estimates.

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