Facebook Inc. (FB) shares were gaining in trading Monday after Credit Suisse hiked its price target on the stock predicting revenue from advertising in the second half of the year will surpass analyst expectations and thus send it higher.

In a research note to clients, analyst Stephen Ju reiterated his buy rating on the stock and upped the price target to $180 from $175 a share. With Facebook shares closing at $153.50, Credit Suisse’s new price target implies more than 17% upside. The investment firm also introduced an end-of-2018 price target of $220 a share, which means the stock could climb an additional 43% next year. “Facebook will be able to drive long term revenue growth without a material lift in ad loads,” wrote Ju. “Street models continue to underestimate the long-term monetization potential of upcoming new products.” (See also: Facebook's New Mission Moves Focus to Groups.)

'Strong Signals'

According to the Wall Street firm, a slowdown in ad impressions in the first quarter that came alongside an increase in ad price growth were “strong enough signals” for the firm to start to think about upside potential in the second half of 2017 when it comes to advertising revenue. What’s more, Ju said conversations with advertisers suggest there will be an uptick in ad prices in the second quarter, which Facebook is reporting on July 26 after the close of trading. That increase is being driven by dynamic ads for travel, growth in ads from the automobile and real estate markets and continued adoption by marketers for precision targeting options that cost more. He said investors should purchase shares of Facebook ahead of a reset higher for second half estimates by the other Wall Street firms. Credit Suisse raised its earnings per share estimate on the social media giant to $5.08 a share from $4.98 a share for the full year. For the second quarter the analyst expects advertising revenue to increase 39% to $8.67 billion, with mobile representing 87% of the ad revenue.

When Facebook reports quarterly earnings later this month, investors and analysts are likely to pepper the company with questions about how it plans to continue to grow its user base, which last month hit the 2 billion mark. (See also: Facebook Hits 2B Users: Will China Get It to 3B?)  

They will also want to know how the social media giant plans to continue to dominate in online advertising and the steps it's taking to clean up its platform after facing criticism that it enables the spread of fake news, hate speech and extremist content. So far this year the stock is up more than 32%.

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