(This story is for CNBC PRO subscribers only.) Consumers may be flocking to the internet as they stay at home during the coronavirus crisis, but Wall Street analysts wonder if that's going to be enough for Facebook . The company is due to report first quarter earnings on Wednesday after the bell and analysts are already urging clients to temper their expectations. Facebook had previously warned in March that it was being "adversely affected" by the pandemic and said it was seeing increased users but weakness in its ad business. Analysts say investors should also watch for an update on Libra, comments on regulation, services like WhatsApp, and more about the company's push into India . Shares of the company are down over 5% this year, more than any other so-called FAANG stock, a group that also includes Netflix, Amazon, Apple and Alphabet. Still analysts say not to give up on Facebook. Here's what analysts expect from the company's first-quarter earnings report: "Facebook will clearly get hit hard by COVID-19 related advertising impact," JPMorgan said. But the firm still loves the stock calling it "one of our top picks" in its coverage area with the balance sheet to weather the storm. Bank of America also acknowledged that the stock could see pressure due to the ad revenue decline but said there were plenty of other positives to look out for. "Bright spots for 1H'20 should include strong usage on Messenger, Instagram, and WhatsApp, and longer-term we continue to see several under-monetized and under-valued FB assets (Messenger, WhatsApp, Watch) and material eCommerce growth opportunities," they said. In the end, investor worries may be overdone with results coming in "better than feared," SunTrust said. "While visibility into timing of the re-opening of the economy remains poor, FB remains well-positioned to re-emerge strengthened given the effectiveness of its platform, its positioning within the digital ad space and its balance sheet." Morgan Stanley - Overweight rating "We are positive on FB's monetization roll-out of Instagram as well as FB's ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with high and growing engagement we see monetization upside going forward." JPMorgan - Overweight rating "Positive as FB remains one of our top picks across our coverage. FB will clearly get hit hard by COVID-19 related advertising impact, and we project Y/Y revenue declines in both 2Q & 3Q, but we expect FB to fare better than GOOGL & next tier platforms TWTR, SNAP, & PINS. FB should benefit from strong stay-at-home engagement and its long tail of 8M+ advertisers. Clearly some of these advertisers will be out of the market (i.e. travel and local), but we believe FB has others who can step in, even if at lower auction density. We expect FB to continue to invest through this period of soft top-line as the company is long-term focused and clearly has the balance sheet to do so." Goldman Sachs - Buy rating "We expect a significant deceleration in revenue growth given the COVID-19 impact in March and see material downside to the FactSet consensus total ad revenue forecast. Our field checks note that although engagement rates have increased meaningfully on account of the current environment, ad spending became disrupted during the second week of March citing particular weakness in the travel, media & entertainment, pockets of retail and auto industries as well as overall SMB spending weakness. .... .Our field checks point to significant volatility in the digital advertising market over the past few weeks on account of the COVID-19 pandemic." Bank of America - Buy rating "Bright spots for 1H'20 should include strong usage on Messenger, IG, and WhatsApp, and longer-term we continue to see several under-monetized and under-valued FB assets (Messenger, WhatsApp, Watch) and material eCommerce growth opportunities. ... .FB also indicated a weakening in its advertising business, especially in countries taking aggressive actions to reduce the spread of COVID-19, though no numerical guidance was provided." Stifel - Buy rating "Numerous advertisers and agencies have reported steep declines in ad pricing since COVID-19 lockdowns began in March, leading to significant negative revisions to Facebook's 2020 revenue forecasts as a result. However, impact to revenue will likely be milder than pricing reads suggest as some pressure has been driven by increased engagement across Facebook & Instagram, while multiple agencies have reported ad prices bottomed out weeks ago and have gradually improved in April. Although COVID-19 headwinds will likely persist for several quarters, recent signs of pricing stabilization / expectations for some local businesses reopening in the coming weeks suggest Facebook's growth in FY 2020 could fare better than Street models. Canaccord - Buy rating "The company has observed a significant increase in engagement across all of its platforms due to shelter-in-place restrictions, and we forecast 8% y/y global monthly active users growth in Q1. However, global economic uncertainty caused by COVID-19 has led to a weakening of the company's advertising business, and we forecast a deceleration of Facebook's ad revenue growth to ~17% y/y. Jefferies - Buy rating "Additionally, FB has significant exposure to small and medium-sized businesses with the company disclosing that its 100 largest advertisers only make up < 20% of total revenue. Given the number of small business closures, layoffs, and furloughs, our checks are showing that businesses in verticals like travel, entertainment, and luxury are completely pausing their ad spending to protect their bottom lines. For 2Q, we are modeling revenue declining 9% Y/Y vs the Street, which is still modeling 3% growth. Despite these near-term challenges, we still believe that FB is well-positioned for stock outperformance over the next 12 months." MKM - Buy rating "While 1Q20 revenue and earnings would weigh on the stock reaction, we believe the key for stock reaction is two-fold: (1) Does management provide incremental commentary weekly trends observed in March and April? (2) FB provided Operating expense to range between $54-59bn, and CapEx to range between $17-19bn. Does the company feel the need to change this guidance amidst pandemic?" SunTrust - Buy rating "Our checks suggest that Jan/Feb were strong, and March, while weaker, was still up Y/Y. We previously lowered our ests to reflect weakening ad demand and increased user engagement, which net net keep us positive on the stock. While visibility into timing of the re-opening of the economy remains poor, FB remains well-positioned to re-emerge strengthened given the effectiveness of its platform, its positioning within the digital ad space and its balance sheet." Raymond James - Strong buy rating "We believe key focus areas for the quarter include: 1) 2Q ad growth and trends QTD; 2) impact of privacy and ad targeting headwinds; 3) expense outlook – we would expect FB to slow hiring (similar to Google); 4) Engagement trends which we believe remain strong. We maintain our Strong Buy rating as: 1) we continue to expect solid though decelerating revenue growth; 2) increasing monetization of newer platforms (e.g., IG) with option value in WhatsApp monetization; 3) we believe expense guidance is likely conservative; 4) we believe the valuation is attractive at ~18x our 2021E GAAP EPS (ex cash)." BMO - Market perform rating "Ad checks since our March 30 update have been weaker and in particular, our checks highlighted relative weakness of social versus search and GOOGL noted tonight that search & other exited 1Q at a negative mid-teens rate. Our FB ad growth in 1Q remains +12%, but 2Q declines to -17% and 2020 to -5%, though with a larger recovery rate in 2021 — albeit lower than our prior revenue estimate on an absolute basis. We continue to see one key Bull point (emergence of Instagram Shopping) balanced against one key Bear point (headwinds from targeting, more within)."
