The stock is up more than 8% mid-day after two analysts upgraded their recommendations, and a third raised his price target. Bernstein Research’s Carlos Kirjner changed his rating to “outperform” from “market perform,” and upped his price target by $11 to $33. He says that investors underestimate Facebook‘s potential to sell ads that target people who visit the social network on smartphones and tablets. The company’s making progress in helping advertisers to insert provocative messages in users’ news streams — not just in separate displays. That should give Facebook more time “to become something different from (and better than) a very large display advertising publisher.” Kirjner projects that Facebook’s ad sales will hit $6.2B next year and $7.8B in 2014 — which he says is “materially above consensus” from other analysts.

BTIG’s Richard Greenfield also is warming to Facebook, upgrading the company to “neutral” from “sell.” He says that it’s “incredibly clear” that the company is running a lot more ads on its mobile app. “It is now common for 25% of the first 20-25 posts within a user’s news feed to be sponsored ads.  It feels as if the load has increased by 50-100% since mid-late Q3 2012.  Remember, 1H 2012 had no ads in the mobile news feed.” Although he considers this “a serious user experience mistake that will be problematic longer-term,” he doesn’t see any impact yet on the number of active users or how much time they spend with Facebook.

And Topeka Capital Markets’ Victor Anthony, who has a “buy” recommendation, raised his price target by $2 to $36 after concluding that Facebook’s Gifts service represents “a huge opportunity.” Anthony calls the buying process “easy, simple, and frictionless.” Facebook should be able to “expand the service into a broader third-party e-commerce platform, with a broader category selection, detailed product descriptions, product reviews, and the encouragement of free shipping from partners.”

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