Mike Isaac

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Facebook’s Early Christmas Gift: Shares Surge on Analyst Upgrades

Facebook’s holiday presents are showing up early.

Shares of the social giant’s stock jumped by more than 8 percent on Monday on news of multiple analyst upgrades. Facebook closed at nearly $26 per share, the highest price the stock has seen since the summer.

Carlos Kirjner, a Bernstein Research analyst, gave the most resounding support of Facebook’s stock over the next two years, upgrading the stock to “outperform” from his previous “market perform” rating (as my colleague Peter Kafka noted earlier).

“Facebook probably can increase the number of ad impressions per user per day,” Kirjner said, “with limited chance of seeing material deterioration in user experience.”

It’s especially surprising given that Kirjner, as The Wall Street Journal earlier pointed out, has been bearish on Facebook since its early days on the Nasdaq.

Indeed, many Wall Street analysts are changing their tunes as of late. The outlook on Facebook’s mobile advertising prospects — once considered the most egregious deficiency in Facebook’s overall monetization strategy — is faring much better.

Rich Greenfield, an analyst with BTIG, raised his price target two dollars on Monday, to $36. Greenfield’s main beef with Facebook mobile ads in the past was that they weren’t nearly as relevant as they should be. The sudden optimism stems from Facebook’s uptick in inserting more mobile ads, which he expects will boost short-term revenue throughout Q4 (though that may prove problematic in the long term).

Other promising reasons for the positive outlook include Facebook Gifts, the company’s push into e-commerce, as well as the up-and-coming Facebook Exchange ad-targeting program.

Facebook shouldn’t break out the eggnog-flavored champagne quite yet. The company’s shares are still down 12 points from the debut share price of $38 in May, and have fluctuated (mostly downward) quite a bit since.

But it’s probably a nice change of pace from hearing the Street’s bearish prospects over the last year.

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