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Facebook to beat the Street: Morgan Stanley

Mark Zuckerberg, founder and chief executive officer of Facebook Inc.
Tony Avelar | Bloomberg | Getty Images

Investors should buy Facebook shares as the internet company company will beat second-quarter earnings estimates on strong user engagement, according to Morgan Stanley, which reiterated its overweight rating.

In June, noted short-seller Andrew Left of Citron Research told CNBC he was bearish on Facebook due share losses to Snapchat.

But in a note to clients Monday, Morgan Stanley's Brian Nowak wrote: "We don't believe Snapchat is having a material impact on FB's engagement or daily active user (DAU) growth. ... Our comScore analysis shows strong FB DAU growth in the 18-24 year old, 25-34 year old and total US mobile user bases."

Facebook will announce second quarter 2016 financial results on Wednesday.