This underrated Facebook business is 'an emerging part' of the bull case, says Deutsche Bank
Facebook Inc.'s [s; fb] Facebook Watch video product hasn't received much love from investors since it launched two summers ago, but Deutsche Bank's Lloyd Walmsley sees room for the offering to become a $5 billion annual business "in the next few years." He called the video offering "an emerging part of the medium-term bull case" though cautioned that in the immediate term, the rise of Facebook Watch could be a drag on revenue because it could cut into the time that users spend on the core news feed. "We think the investment in getting users to watch video content on the platform and potential long-term monetization far outweighs any near-term headwinds," wrote Walmsley, who has a buy rating and $220 target on the shares. Facebook's stock is up 0.1% in premarket trading Thursday and up 34% so far this year, compared with a 15% gain for the S&P 500 .
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