UBS analyst Eric Sheridan upgraded Facebook (FB) to Buy from Neutral and raised his price target for the shares to $240 from $170.

The stock in premarket trading is up 9%, or $15.69, to $198.27.

While 2019 remains a year of transition, Facebook management has now produced multiple quarters of better than expected revenue and earnings, Sheridan tells investors in a research note following last night's Q1 results. Instagram is now one of the Internet's large-scaled digital ad platforms that can sustain growth and operating leverage for years to come, contends the analyst.

Further, he believes that while concerns will persist about core Facebook maturation, regulatory headwinds and safeguarding the platform for a privacy-first approach, the "market now better understands many of those risks." Facebook's operating momentum is greater than business transition fears, Sheridan concludes.