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Bank of America says Facebook is no longer one of its favorite stocks in wake of data scandal

Key Points
  • Bank of America Merrill Lynch removes Facebook from its US1 top ideas list.
  • "Facebook (FB) is being removed as we are making an adjustment based on the overall composition of the list," the firm's research team writes Tuesday.
  • The bank's move comes after it lowered its price target for the internet company twice in 5 days last month.
Mark Zuckerberg, CEO, Facebook
David Paul Morris | Bloomberg | Getty Images

Bank of America Merrill Lynch is getting less bullish on Facebook.

The firm reiterated its buy rating for the internet company but took it off its US1 top ideas list. The bank did not provide much detail for the removal.

"Facebook (FB) is being removed as we are making an adjustment based on the overall composition of the list," the firm's research team wrote Tuesday.

The company's stock rose 0.5 percent Tuesday after the report.

Bank of America Merrill Lynch cut its Facebook price target two times in 5 days last month, citing confirmation of FTC's probe into its data practices.

The government investigation "raises the risk of civil penalties on data privacy violations, and if history serves, could take multiple years to resolve," analyst Justin Post wrote in a note clients on March 27.

Facebook has been under fire over its handling of its data scandal following reports that political research firm Cambridge Analytica was able to gain access to profile data of more than 50 million of the social media company's users.

The company's stock has declined more than 11 percent over the past month through midday Tuesday.

— CNBC's Michael Bloom contributed to this story.