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RayJay downgrades Facebook, but ups price target

NEW YORK (AP) -- Facebook edged lower in midday trading as Raymond James downgraded its shares Monday, but also upped its price target by $18.

Analyst Aaron Kessler sees a lot of potential in advertising for Facebook and remains confident about the company's trajectory.

However, the price for a single share of the social networking site is up more than 90 percent this year, more than 140 percent in the past 12 months.

Share rocketed higher in July after the company shocked Wall Street with enormous sums of revenue generated by mobile ads, an area that had been considered a potential weak spot.

"We maintain our positive fundamental view on Facebook and expect (third quarter) upside driven by strong traction with mobile advertising, as well as newer ad formats," Kessler wrote.

Kessler expects mobile advertising growth of 23 percent and cites newer ad formats like a mobile app installation that the company is embracing.

The Raymond James analysts also introduced revenue projections for Instagram, the online photo site that Facebook acquired last fall for $715.3 million.

Kessler sees Instagram revenues of $178 million in 2014, and $456 million in 2015.

Still, Raymond James downgraded the stock from "outperform" from "strong buy" given the 10 percent upside potential to its new price target.

Kessler believe shares will hit $56 in the next 12 months.

At around noon Monday, shares of Facebook Inc. fell 21 cents to $50.83.