Facebook Inc. shares (FB) are up 1.7% in Tuesday morning trading after BMO Capital Markets analyst Daniel Salmon upgraded the stock to outperform from market perform and boosted his price target to $325 from $270. Salmon wrote that while the company could see its targeting capabilities reduced due to an Apple Inc. privacy measure on its iOS operating system, this action could mark the "peak" of "targeting headwinds" for Facebook. "We increasingly believe that over the short-to-medium-term FB will be able to mitigate some of these losses via new tools...while over the medium-to-longer-term, we see FB lowering its reliance on targeting events/ signals generated from outside its walled garden as more advertiser conversions occur in platform," he wrote. Salmon is also upbeat about ongoing initiatives at Facebook as the company looks to drive increased revenue from areas like e-commerce, messaging, and payments. He still sees "acute" risks for the company around the potential for heightened security spending, which could hit margins, as well as antitrust pushback, though he doubts regulators will take "material" action in the next year. Facebook shares have lost 2.7% over the past three months as the S&P 500 has risen 10.6%.
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