In a research note this morning, Argus analyst Joseph Bonner lowered his price target on Facebook shares to $210 following the recently disclosed security breach that compromised personal information of 50M user accounts. However, the analyst argued that the headlines of a "massive" security breach may be excessive. Meanwhile, his peer at Deutsche Bank told investors yesterday that he sees heightened risk to estimates for Facebook after attending an advertising industry event.

ARGUS CUTS TARGET, KEEPS BUY RATING: Following last week's disclosure that a security breach resulted in the compromised personal information of 50M user accounts, Argus' Bonner lowered his price target on Facebook to $210 from $237. However, the analyst argued that the headlines of a "massive security breach" may be excessive, since it is not clear whether any accounts were misused, adding that fears of a massive fine may also be exaggerated as Facebook reported the breach within the GDPR-mandated 72-hour window. Facebook is having a "tough year", with continued fallout from the Russian troll operation in the 2016 election and the Cambridge Analytica scandal, the exit of several senior executives, and the recent report of the breach, he noted. Despite the challenging near-term outlook, Bonner remains bullish on Facebook based on its position as the dominant social media site. Moreover, the analyst told investors that even as flagship Facebook matures, Instagram, Facebook Messenger, and WhatsApp have all reached a critical mass of users and are poised for monetization. He reiterated a Buy rating on the stock. Meanwhile, in a research note yesterday, Deutsche Bank analyst Lloyd Walmsley said he sees heightened risk to the third and fourth quarters and 2019 consensus estimates for Facebook. After attending the first day of AdWeek, the analyst pointed out that he is starting to hear more cautious feedback and that Facebook seems on the defensive, particularly following last week's data breach disclosure. Walmsley, however, continues to view Facebook as attractively valued, reiterating a Buy rating and $205 price target on the shares.

SECURITY BREACH UPDATE: Last night, Facebook posted an update on the recently disclosed security attack. "This was a serious issue and we worked fast to protect the security of people's accounts and investigate what happened", the company said. "We fixed the vulnerability and we reset the access tokens for a total of 90M accounts - 50M that had access tokens stolen and 40M that were subject to a 'View As' look-up in the last year. Resetting the access tokens protected the security of people's accounts and meant they had to log back into Facebook or any of their apps that use Facebook Login". The company added that its investigation of the matter has so far found no evidence that the attackers accessed any apps using Facebook Login.

WHAT'S NOTABLE: Users of Instagram, Facebook's photo-sharing social network, experienced an outage across several cities, including London, San Francisco, and Singapore, Reuters reported. The mobile app and website, which were down temporarily on Wednesday, are now back up. The app had displayed an error message saying "couldn't refresh feed", while its website did not load for users.

PRICE ACTION: In morning trading, shares of Facebook have gained about 1% to $160.70.