Nomura Instinet analyst Mark Kelley upgraded Facebook (FB) to Buy from Neutral and raised his price target for the shares to $215 from $172. The stock closed Friday up 47c to $169.60.

Facebook's transition to Stories appears to be occurring more quickly than we expected, Kelley tells investors in a research note titled "A New Story to Tell." As such, the analyst says his concerns over engagement trends at core Facebook have eased. Given management's original commentary that operating margins would trend towards the mid-30% range over "the next several years," and considering guidance for 2019 expense growth essentially equates to 35%-36% operating margins right out of the gate, the expense growth outlook may be tempered as we progress throughout the year, says Kelley.

Further, he continues to believe that increased regulation will be a net positive for large platforms like Facebook. The analyst finds the stock attractively valued at current levels.