Internet Stocks to Watch: Facebook Inc. (NASDAQ:FB), Netflix Inc., (NASDAQ:NFLX)

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Facebook Inc. (NASDAQ:FB) has begun testing the idea of running video ads on its photo-sharing Instagram service, a new ad-tweak that is being carefully managed as competition for video ad dollars with Twitter (TWTR)and YouTube heats up.

According to industry-bible Adweek, Facebook is already testing video ads on its Instagram service. But Instagram is “a bit of a control freak” when it comes to advertising and so the company is taking a “slow approach” to building the new ad-revenue generator. Mindful of the youthful demographic Instagram enjoys, every sponsored image will be pre-approved and each brand vetted. The brands involved in the program are stalwart, middle-of-the-road names like Levi’s, Ben and Jerry’s and Burberry.

The new ad revenue from Instagram will be well-received by Facebook investors. The company shocked markets by paying a mighty $1 billion for Instagram as Facebook struggles to turn massive popularity into solid ad revenue. So far, only fifteen advertisers have been approved for sponsored images. Pre-approval represents a different approach than the self-serve model advertisers are used to with Facebook.

Analysts have a consensus price target of $72.11 on Facebook Inc. (NASDAQ:FB) which indicates a 14% upside. The consensus rating of the stock is a BUY with a score of 2.84. There are currently 6 Hold Ratings and 32 Buy ratings on the stock.

The most recent analyst action consisted of Credit Suisse upgrading the stock to Outperform and boosting its price target from $65 to $87.

Netflix Inc., (NASDAQ:NFLX) is a Monday decliner, along with most Internet content, social media, and entertainment stocks, but its slide could be limited by speculation it’s continuing a push for original programming.

Netflix is close to a deal with current E! talk-show host Chelsea Handler for a new show, The New York Post reports, citing one unnamed source said to be familiar with the agreement. The article says a deal is done but a format is still being determined.

Handler has said she will leave NBCUniversal’s E! cable network as host of “Chelsea Lately” when her current contract expires at the end of the year. She has been outwardly critical of the network.

NFLX moves in a 52-week low of $204.02 to $458.

Analysts have a consensus price target of $378.71 on Netflix Inc., (NASDAQ:NFLX) which indicates a 1.58% upside. The consensus rating of the stock is a HOLD with a score of 2.30. There are currently 23 Hold Ratings, 4 sell ratings and 15 Buy ratings on the stock.

A recent analyst action consisted of Jeffries reiterating their underweight rating and price target of $300.

 

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