(Bloomberg) -- Facebook Inc.'s gains accelerated Wednesday, sending shares higher by 8.2%, as analysts hailed a new shopping section on its namesake social network, projecting strong e-commerce growth potential.
The stock closed at a record $303.91, rising for a third straight day. JMP Securities, which rates Facebook at a buy-equivalent rating of market outperform with a price target of $305, said there are “multiple catalysts” for Facebook, and e-commerce “can be a significant opportunity.” There is “a clear line of sight to monetizing” the new section, dubbed Facebook Shop, according to analyst Ronald Josey.
While advertising should remain Facebook's focus, the growth in e-commerce means the site “can generate greater product discovery” for small and mid-sized businesses relative to other channels, JMP said.
Stifel, which rates Facebook a buy, said the accelerated roll-out of the Shop service “suggests the benefits to growth could be evident as early as 2021,” and Facebook waiving selling fees in 2020 “could accelerate the adoption of these tools.”
Over the long term, Facebook's e-commerce opportunity “should come more from increased adoption of digital ads” by small and mid-sized businesses than transaction fees, said analyst John Egbert.
Shares of Facebook have more than doubled since their 52-week intraday low of $137.10 in mid-March.
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