- The market is overreacting to the news of political research firm Cambridge Analytica's
- Further, Facebook's revenue won't be impacted too muc by the European Union's General Data Protection Regulation, according to Sandler.
- Facebook's highest performing advertisements use non-sensitive user information that is not subject to GDPR rules.
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BARCLAYS: 'The bear case that Facebook’s platform is likely to implode seems over-done' (FB)
Facebook shares are getting hammered, but one Barclays analyst thinks the market is overreacting.
Facebook's recent woes are excessive, according to Barclays analyst Ross Sandler. Shares of the social media giant entered a bear market Monday on news of a massive data scandal involving political research firm Cambridge Analytica.
Investors fear Facebook users might delete their accounts in order to protect their personal information, but more importantly, that an Federal Trade Commission investigation of the Cambridge Analytica scandal and the European Union's pending General Data Protection Regulation (GDPR) will hinder advertising revenue growth.
But Sandler doesn't think Facebook's problem is all that bad. "T
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the overall impact will be relatively small given the diversity of customer acquisition channels and the reliance on non sensitive data which is largely already in compliance with GDPR standards in Europe," Sandler wrote in the earlier note.
Sandler gives a price target on Facebook of $225, compared to Wall Street's $220. Shares are trading down 3% Tuesday, hovering around $154 a share.
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