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Facebook shares hit all-time high on upgrade

NEW YORK (AP) -- Shares of Facebook Inc. hit an all-time high Friday after analysts at Cowen & Co. upgraded the social media company's stock, forecasting that its advertising revenue will rise dramatically.

THE SPARK: Cowen analysts John Blackledge and Thomas Champion upgraded Facebook shares to "Outperform" from "Market Perform." They also nearly doubled the stock's price target to $53 from $29.

THE BIG PICTURE: Facebook went public in May 2012. Its stock had a rocky start at first but its shares have been rising since July, when it posted strong second-quarter results thanks to higher revenue from mobile ads.

The company has over 1 billion monthly active users.

THE ANALYSIS: Blackledge and Champion expect total ad revenue to jump from $6.5 billion in 2013 to $25.9 billion by 2018. Marketers are getting "strong" return on investment after advertising on Facebook, they said.

Facebook's photo sharing app Instagram is expected to bring in more ad revenue. The analysts expect Instagram to start advertising next year. Facebook's video and mobile ad revenues are also expected to grow, Blackledge and Champion said in a note to clients.

A representative from Facebook declined to comment.

SHARE ACTION: Shares rose 60 cents to $46.59 in afternoon trading after hitting an all-time high of $46.64 earlier. At Friday's peak, the shares are up 23 percent from the initial public offering price of $38 and up 75 percent since the beginning of the year.