Facebook falls after analyst says Q4 expectations look optimistic

Facebook (FB) is retreating after Deutsche Bank analyst Ross Sandler wrote that investors' expectations for the company's fourth quarter revenue have become too optimistic. After conducting a survey, Sandler believes that investors expect the social network's fourth quarter revenue to be $1.6B, which is excessive, the analyst wrote in a note to investors earlier today. After surveying ad buyers, Sandler believes that Facebook's newer News Feed ads probably caused advertisers to spend less on the company's older right column ads. Still, Sandler continues to see mobile newsfeed ads as an exciting growth catalyst for the company, and he expects Facebook to report solid Q4 margins. Moreover, the analyst maintained a $40 price target and Buy rating on the shares. In early trading, Facebook fell 76c, or 2.34%, to $31.71.

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