Piper Jaffray analyst, Gene Munster, weighed in on Facebook Inc (NASDAQ:FB) after his recent survey on the social network giant’s virtual reality product, Oculus Rift, showed high consumer interest and willingness to buy the product.
Mr. Munster commented: “Our recent survey suggests consumers are impressed with the current developers version of Oculus Rift, and are willing to pay for it.” The analyst thinks that Occulus Rift will be able to gain the attention of Facebook investors in the next five years, and this will start to affect Facebook’s business model in five to 10 years.
The analyst recalled that last week, his company had given a demo of Occulus to 40 individuals in Minneapolis. The participants rated the product 8.6 out of 10, and were willing to pay $342 on average to buy the device.
Mr. Munster also said that he expects that the product would launch in the December-15 quarter. As the launch comes closer, the analyst believes that “Oculus will begin to highlight more functionality of the product as well as third-party apps, which we believe will accelerate adoption.”
Occulus Rift is a virtual reality head-mounted display (HMD) developed by Occulus VR – a virtual reality technology company that was acquired by Facebook for $2 billion in cash and Facebook shares in March 2014.
Piper Jaffray reiterated an Overweight rating with a target price of $82 for Facebook stock.
Sell side
The overall sell side is overwhelmingly bullish on Facebook stock. According to Bloomberg statistics, out of 57 analysts covering the stock, 48 rate it a Buy, and eight recommend a Hold. The highest target price on the stock is $105, with a Buy rating, given by MKM Partners analyst Rob Sanderson. The 12-month average target price assigned by analysts is $88.1.
Facebook shares are currently down 0.46% and trading at $78.09, as of 11:57AM EST.