Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.

FACEBOOK TO REPORT Q4 EARNINGS: Facebook (FB) is scheduled to report Q4 results after market close. This follows an earnings beat in the previous quarter which saw EPS of $2.71 and revenue of $21.47B. Deutsche Bank analyst Lloyd Walmsley raised the firm's price target on Facebook to $350 from $325 and maintained a Buy rating on the shares. The analyst believes the company's Q4 results and the outlook are "likely to be a clearing event" for shares, with management "ring-fencing" the outlook for Q1 and Q2, the first full quarter with changes to Apple's (AAPL) advertising Identifier. The short-term impact from these changes could be slightly larger than investors appreciate, though the impact will be short-lived and likely resolved such that 2022 estimates are largely unaffected or even potentially higher, Walmsley told investors in a research note. Piper Sandler analyst Thomas Champion said he expects "strong" results, but sees the stock reaction hinging more on the qualitative discussion of 2021 revenue prospects, including pace of e-commerce growth, plus possible headwinds associated with user targeting and regulation.

SNAP, TWITTER MAKE ACQUISITIONS: This week has seen both Snap (SNAP) and Twitter (TWTR) take part in M&A. Snap has acquired computer vision startup Ariel AI, whose 12-person team has joined Snap's computer vision team and is working on making the Snapchat app's camera smarter, Business Insider's Shona Ghosh reported. Ariel AI describes itself as: powering the next generation of consumer experiences on mobile devices through pixel-accurate, real-time 3D Human Perception and Reconstruction. The company said on its website, "Ariel AI enables a world of seamless augmented reality, immersive gaming, motion capture, kinetic learning, holographic telepresence, and experiential retail - all on standard mobile devices. " Twitter has acquired Revue, a service that makes it free for anyone to start and publish editorial newsletters. In a company blog post, Kayvon Beykpour, product lead and Mike Park, VP of publisher products, said, "Twitter is where people go to see and talk about what's happening in the world. It's where writers, experts and curators - from individual creators to journalists to publishers themselves - go to share their written work, spark meaningful conversations and build a loyal following. These writers and long-form content curators are a valuable part of the conversation and it's critical we offer new ways for them to create and share their content, and importantly, help them grow and better connect with their audience... Revue will accelerate our work to help people stay informed about their interests while giving all types of writers a way to monetize their audience - whether it's through the one they built at a publication, their website, on Twitter, or elsewhere." Twitter has already said its making Revue’s Pro features free for all accounts and lowering the paid newsletter fee to 5%. Terms for both transactions have not been disclosed. 

TWITTER SETTLES LAWSUIT: Twitter announced that it has entered into a binding agreement to settle the shareholder derivative lawsuits pending in the Court of Chancery of the State of Delaware and the United States District Court for the District of Delaware against the company and certain current and former directors and officers. The proposed settlement resolves all claims asserted against Twitter and the other named defendants in the derivative lawsuits without any liability or wrongdoing attributed to them personally or the company. Under the terms of the proposed settlement, the Twitter board will adopt and implement certain corporate governance modifications. In addition, Twitter's insurers will pay the company $38M to be used for general corporate purposes. The settlement will not require Twitter to make any payment, aside from covering certain administrative costs related to the settlement, such as those associated with publishing and mailing shareholder notice. The settlement agreement is subject to final approval by the Court. The Court has scheduled the final approval hearing for March 19, 2021 at the Court of Chancery of the State of Delaware to consider approval of the settlement agreement.  

ANALYST SENTIMENT: Canaccord analyst Maria Ripps raised the firm's price target on Snap to $58 from $52 and keeps a Buy rating on the shares. The analyst said the company has seen success due to its brand-safe content and younger audience, and as the audience continues to age up, it may attract advertisers in the financial and insurance industries. While Truist and Oppenheimer both raised the price target on Facebook ahead of earnings, Credit Suisse analyst Stephen Ju lowered the firm's price target on shares to $325 from $330 and reiterated an Outperform rating. The analyst expects ad pricing to take an increased role in Facebook's revenue growth this year, particularly as the company had taken steps to ramp volume in tandem with engagement growth last year. Ju told investors that the firm's advertiser checks are indicating better-than-expected ad budget growth for both Facebook and Instagram. During last week, Stifel analyst John Egbert initiated coverage of Pinterest (PINS) with a Buy rating and $85 price target. Pinterest has "carved out a valuable niche in social media" that Egbert views as both sustainable and "potentially more broadly appealing over time," he noted. Piper Sandler provided a batch of initiations as well, but none with the Buy designation. Piper Sandler analyst Thomas Champion initiated coverage of Twitter and Pinterest with a Neutral rating . Price targets for the stocks were $45 and $70 respectively. In a note to investors, Champion said Twitter boasts "decent scale and punches above its weight in consumer relevance," but has had difficulty growing at the rate of digital advertising overall and its financial results have been "mixed." Regarding Pinterest, the analyst has "some concern" over the company's current concentration in the U.S. and notes that the stock concluded 2020 with a "fantastic run." Lastly, Champion initiated coverage of Snap with an Overweight rating and $66 price target. Snap appears well positioned with a "mobile first, visual and video product experience that has been embraced by Millennials and Gen Z's," he commented.