Meta Platforms, the parent company of Facebook and Instagram, is receiving increased attention from analysts who are eager to raise their price targets for the company’s shares. The optimism is driven by promising signs of improvement in the digital advertising market.
For the upcoming June quarter earnings report, Meta has projected revenue ranging from $29.5 billion to $32 billion. Street estimates are anticipating $31.1 billion in revenue, representing an 8% increase and an acceleration from the 3% growth observed in the previous quarter. Additionally, the profit is expected to reach $2.90 per share.
While Meta recently made headlines with the launch of Threads, its Twitter competitor boasting over 100 million sign-ups, the focus for investors lies in the recovery of Meta’s digital ad business. This includes enhanced monetization of Reels—the company’s TikTok clone—and the potential for generative artificial intelligence applications to bolster advertising targeting and challenge existing market leaders like Microsoft and Alphabet.
Positive sentiment also stems from Meta’s ability to address ad targeting challenges resulting from Apple’s crackdown on iPhone user targeting. The company’s newly introduced advertising tools, known as “Advantage+,” are seen as pivotal in overcoming these obstacles. Furthermore, analysts remain bullish on Meta’s cost-cutting efforts, deemed the “year of efficiency,” which have effectively improved the company’s profit margins.
However, market observers are raising questions about how much of these factors have already been priced into Meta’s shares. The stock has surged 46% since the first-quarter results were announced and has soared over 150% year-to-date. Despite this, on Monday, four analysts adjusted their target prices on Meta’s stock, resulting in a marginal 0.1% decrease to $308. It is worth noting that these changes occurred amidst a broader Nasdaq Composite rally, which saw a 0.7% increase.
In conclusion, it is evident that analysts hold an optimistic outlook on Meta Platforms’ future prospects. With the upcoming earnings report, investors eagerly await further validation of Meta’s rebound in the digital ad sphere and its continued efforts towards innovation and efficiency.
BofA Global Research: Meta Shares to Surge
BofA Global Research analyst Justin Post has reiterated his positive outlook on Meta shares, while raising the target price to $350, up from $320. Post predicts that the company will surpass Street estimates, forecasting $31.6 billion in revenue and a profit of $3.13 per share.
Post notes that Meta is well-positioned among internet giants for revenue acceleration in the second half of 2023. He also highlights the company’s investor-friendly approach to profitability and cost-cutting, which he believes will drive further margin expansion.
JMP Research: Meta Benefits from Positive Trends
JMP Research analyst Andrew Boone maintains a Market Perform rating on Meta stock, but has increased the target price to $350 from $300. Boone’s decision reflects strong engagement trends, improved ad performance driven by AI, and a stabilizing advertising environment. Boone also mentions that Meta is poised to benefit from various product catalysts such as Reels, AI, and cost discipline.
Credit Suisse: Meta Shares Continue to Outperform
Credit Suisse analyst Stephen Ju shows confidence in Meta shares by maintaining an Outperform rating and raising the target price to $361 from $277. Ju’s assessments align with other analysts as he finds that advertisers’ feedback suggests accelerating ad budget growth.
Goldman Sachs: Positive Projection for Core Ads Business
Goldman Sachs analyst Eric Sheridan remains bullish on Meta, maintaining a Buy rating and increasing the target price to $335 from $300. Sheridan highlights an improvement in the company’s core ads business as a driving factor behind his positive outlook.
Meta is scheduled to report earnings after the market closes on July 26th.
