CHICAGO, May 21, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Facebook (Nasdaq:FB-Free Report), Omnicom Group Inc. (NYSE:OMC-Free Report), Procter & Gamble (NYSE:PG-Free Report), Verizon (NYSE:VZ-Free Report) and Coca Cola (NYSE:KO-Free Report).
Today, Zacks is promoting its 'Buy' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Notes on Facebook, Publicis Deal
Recently, Facebook (Nasdaq:FB-Free Report) entered into a multi-year partnership with French advertising agency, Publicis Groupe. Although the financial terms of the deal were not revealed, per Advertising Age, the value of the deal is approximately $500 million. Shares of Facebook were up 2.05% ($1.19) following the news.
The deal between Facebook and Publicis happened soon after the proposed merger between Publicis and Omnicom Group Inc. (NYSE:OMC-Free Report) failed. Publicis and its ad agencies have a strong clientele that includes the likes of Procter & Gamble (NYSE:PG-Free Report), Verizon (NYSE:VZ-Free Report) and Coca Cola (NYSE:KO-Free Report).
Under the partnership agreement, Publicis will gain access to Facebook's ad inventory and data. This will give Publicis a sense of the performance of Facebook ads. Although technical details of the transaction were not available, it seems that Publicis will be able to use Facebook engineers and creative team to build a special ad unit or content for Instagram.
In March, Instagram partnered with Omnicom for an ad deal that is worth up to $100 million. The current agreement is expected to further expand Facebook's popularity among advertisers, who will try to leverage its massive user base.
As Facebook's ad business matures, top-line growth is expected to suffer. Facebook's rapid pace of acquisition is also expected to weigh down on profitability and cash balance in the near term. Intensifying competition remains a major concern.
In such a scenario, partnerships such as this, along with new products like video ads and mobile-advertising network will help Facebook to sustain its revenue growth momentum.
Further, we believe that Facebook's growing mobile user base, Instagram's increasing popularity, frequent launches of new products and international expansions will boost the company's top line and profitability going forward.
Currently, Facebook has a Zacks Rank #2 (Buy).
Today, Zacks is promoting its 'Buy' stock recommendations. Get #1Stock of the Day pick for free.
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