J.P. Morgan is getting less optimistic about Facebook due to the company's rising investment spending.
The firm lowered its price target to $195 from $205 for Facebook shares. J.P. Morgan also reduced its 2019 earnings estimate for the company due to higher expense spending.
Facebook's "investments in 2019 could be larger than anticipated in consensus estimates. We expect the narrative of heavy investment spending to continue at 3Q earnings," analyst Doug Anmuth said in a note to clients Tuesday. "Safety and security, around which FB will add 20k+ heads this year, will fall across multiple opex lines, but comes with little/no immediate revenue return."