
http://www.bloomberg.com/news/2014-...illion-84-above-prior-estimate-citi-says.html
Instagram, the photo-sharing app owned by Facebook Inc. (FB), is worth $35 billion, almost double its previous valuation, according to an analyst.
Instagram’s faster-than-expected user growth and increased revenue from advertising mean the company is valued at more than the $19 billion previously estimated, Mark May, an analyst with Citigroup Inc., said in a note.
“While Instagram is still early in monetizing its audience and data assets and its financial contribution to FB is minimal today, we believe that it is quickly gaining monetization traction,” May wrote, using Facebook’s ticker symbol. He cited “faster growth in its audience as well as continued monetization gains by social media properties.”
The estimate puts Instagram in the same realm as American Airlines Group Inc., with a market capitalization of $36.4 billion (AAL), and Kraft Foods Group Inc. (KRFT), at $37.2 billion.
May recommended buying Facebook shares and boosted his price target for the stock to $91 from $86.
Facebook shares rose 1.5 percent to $79.57 at 10:21 a.m. New York time. Through yesterday’s close, the stock had advanced 43 percent this year, topping the 12 percent gain of the S&P 500. The company, which also owns popular mobile applications including messaging service WhatsApp Inc., is valued at $222.9 billion.




