Facebook (FB) engagement is becoming more stable and more users turn to Instagram instead of Snapchat. Those are the results from a study released today by Baird’s top analyst Colin Sebastian. The quarterly survey of 1,500 internet users in the U.S. shows a stable and increasing number of engaged Facebook users. This comes after declines in the early to middle part of 2018. Sebastian says the data is making him move away from a cautious approach to a more positive one as he predicts trust and usage will improve throughout this coming year.

As a result, Sebastian reiterates an Outperform rating on FB stock with a price target of $195, which implies about 37% upside from current levels.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Colin Sebastian has a yearly average return of 19.9% and a 66% success rate. Sebastian has a 17.3% average return when recommending FB, and is ranked #23 out of 5,120 analysts.

The survey results show a slight uptick in Facebook engagement when comparing to the quarter prior. This quarter shows 36.50% of responders are using the site the same or more than in the third quarter of 2018, which was 35.50%. The data also showed respondents were skewing older – between 45–54 and 55-64. These two age groups demonstrate the highest rate of stable or increasing engagement with the social media site. Users in the 18–24 age bracket showed stable or increasing Instagram usage, which is a first in the researcher’s survey history. Sebastian also followed up with the Vice President of Merkle media group in order to learn how the site is doing with advertising dollars.

“We believe that at least stable engagement on Facebook suggests the shift to Stories has limited impact on usage, despite the cannibalization in impressions from the core Newsfeed. As such, we see little risk in achieving moderate Q4 top line growth targets, which already reflected the Stories mix shift and contributions from lower ARPU geographies. While newer engagement channels create a near-term drag on monetization, as more ad formats/advertiser demand feed into Stories, we believe the pricing spread will converge (similar to prior desktop-to-mobile migration)” the analyst explains.

“On our late-November call with Merkle, there was little evidence of advertising backlash related to recent data/privacy concerns, nor a material shift in ad budgets away from Facebook to other platforms. As such, we continue to believe the slowdown in Facebook growth is more likely related to impression growth (e.g., flat ad loads, shifting focus to Stories) rather than broader advertiser behavior changes,” Sebastian added.

Despite Facebook experiencing a tough year – with scandals and data breaches bringing out the clouds over the company, analysts still believe in the stock. TipRanks analytics shows that out of 40 analysts, 33 are bullish, 5 are sidelined and 2 bearish. The consensus price target of $185.32 shows a potential upside of 34%. (See FB’s price targets and analyst ratings on TipRanks)