Facebook (FB) hosted its annual Connect virtual and augmented reality conference last week, in the process unveiling a lineup of new devices, services, and partnerships.
Among the offerings to be added to the ever-expanding FB ecosystem are a new Oculus Quest 2 VR headset, Ray-Ban branded smart glasses, and a collaboration with the New York Times for AR journalism content to be published on Instagram.
Although it might take a while before the new additions make their mark on the social media giant’s balance sheet, Stifel analyst John Egbert is in no doubt as to the long term importance of one of the company’s less headline grabbing segments.
“Although VR / AR initiatives are unlikely to meaningfully influence the company’s financials in the near-term,” the 5-star analyst said, “Facebook Connect highlighted the company’s potential to be a leader in these emerging computing paradigms and potentially lessen its dependence on Google and Apple to distribute its services in the future. We are incrementally positive on Facebook’s ambitions in VR / AR following the event.”
As per tradition, Connect’s main focus revolved around the company’s VR division Oculus. Facebook presented the Oculus Quest 2, the follow up to its original Quest VR headset. The successor will boast a headset with four tracking cameras and two Oculus Touch motion controllers and will begin shipping in October for the price of $299 at the lower end and at $399 for the expanded model with additional memory (these are cheaper than the $399 to $499 price range of the original headsets).
Facebook’s long talked about entry into augmented reality glasses took a step closer to fruition with the announcement it will release its first pair of consumer smart glasses next year. The product is a collaboration with Ray-Ban and although the glasses won’t be a fully featured AR device, it will act as a “stepping stone” towards a true wearable AR device which the company’s Reality Labs division will develop.
Facebook also announced a partnership with the New York Times, in which Instagram will publish a series of AR-driven reports. The series will kick off with pieces on the centennial anniversary of women’s suffrage, coverage of the California wildfires and an article about air quality during the COVID-19 lockdown.
All in all, Egbert reiterated a Buy on FB shares and sticks to his $290 price target. There’s possible upside of 14% from current levels. (To watch Egbert’s track record, click here)
Most of the Stifel analyst’s colleagues are no less confident. FB’s Strong Buy consensus rating is based on 31 Buys, 4 Holds and 1 lone Sell. The forecast is for 16% upside in the next 12 months, given the average price target clocks in at $295.56. (See Facebook stock-price forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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