Meta Platforms Analysts Opinions

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Analyst Ronald Josey of Citi maintained buy rating on Meta Platforms and raised price target to $360 from $315 while pointing out that;

  • Though Instagram’s app downloads were around 12% below that of TikTok this quarter, its monthly active users rose 6% year over year versus a 4% gain in TikTok’s users.
  • Growth in time spend per active users of Instagram has outpaced TikTok for a 7th consecutive month.
  • Reels ad-load has hit 17% quarter-to-date and 18% this month.
  • He believes advertising market is now “stable-to-improving”.
  • Josey believes advertising revenue will grow by 14% year over year in 2024 and Reels will account for around $10.5 billion in ad revenue.

Meta Platforms - InvestmentWiki.

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  • TD Cowen analyst raised Meta Platforms price target from $220 to $345 and upgraded it from market perform to outperform citing improving engagement in Reels and Facebook.

    “TD Cowen Proprietary 2Q23 Social Survey Data through June '23 shows modest [year-over-year] engagement improvement at Instagram and Core Facebook,” he wrote.

    “Respondents once again indicated rising usage of IG Reels, suggesting that Reels could be a driver of incremental time spent on Instagram.”

  • Analyst John Blackledge believes that Meta second-quarter revenue and earnings will beat Wall Street estimate.

  • Blackledge also raised his revenue and earnings estimates over the next five years by 8% and 7% on average, respectively.

Meta Platforms - InvestmentWiki

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  • Aided by Reels, Click to Message and core ads business, Meta could generate earnings of up to $20 per share by 2024, Morgan Stanley said.
  • Analyst Brian Nowak projects that Reels monetization could grow to 44% in 2024 from 28% at the moment.
  • He said click to message accounts for about $12 billion of total ad revenue and growing by 36% year-over-year.
  • Nowak said that Meta’s other ad business is still “choppy” due in part to Apple’s privacy change, but expects “more durable” core revenue growth in future as a result of more innovations.
  • He projects that a 1% year-over-year increase in core revenue results in a 1% increase in EPS.

https://seekingalpha.com/news/4009924-meta-20-earnings-per-share-2024-morgan-stanley

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  • Truist maintains buy rating on Meta and a price target of $390.
  • It is positive on Meta’s AI-powered experiences showed at Meta Connect 2023.
  • However, Truist is constructive on Meta based on prospects for a strong growth in Q3 and into Q4.

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  • Bofa analysts reiterated their buy rating on Meta Platforms with a price target of $375 following news that the company is pitching to EU regulators ad-free subscription plans.
  • The analysts think €156/year (~$163) subscription option is a high price and expect most users to stick with the free version.
  • They also expect the regulators to pushback on the proposal.
  • However, the analysts said if the proposal go through, Meta will benefit since the paid version will monetize better.
  • Other things that make them positive on Meta include ramping Reels and messaging monetization, and growing AI capabilities.

https://seekingalpha.com/news/4018170-meta-reaffirms-with-buy-bofa-potential-ad-free-subscription-service-eu-users

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  • According to a Morgan Stanley survey of 2,000 Americans, 79% of Instagram users now use Reels, up from 74% in May, and 36% are using Reels daily, up from 34%.
  • Similarly, 69% of Facebook users now use Reels, up from 65% in May, and 30% use Reels daily, up from 27%.
  • Morgan Stanley analysts said the growth in Reels engagement could push earnings to $20 per share in 2024.
  • They added that their conversations with advertisers point to an incremental ad scaling for Reels.

https://seekingalpha.com/news/4021250-metas-reels-morgan-stanley

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SI=2%, I=4
Buy, $375: Loop Capital is encouraged by Meta’s continued product developments, especially the recently launched gen-AI products.

Summary

I=4
Top-pick, $384->$405: Bofa is positive on Meta due to its underappreciated AI capabilities, growing monetization of its messaging apps, ongoing monetization of Reels, and strong usage trends around video.
https://seekingalpha.com/news/4045141-bofa-expects-global-ad-spend-to-grow-12-in-2024-meta-top-pick-among-large-caps

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Outperform, $375: Analyst Mark Shmulik of Bernstein Research expects growth stocks from the internet internet industry to have a comeback in 2023 with above average profits.

https://www.finanzen.net/analyse/meta_platforms_ex_facebook_outperform-bernstein_research_927261

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$380->$420: Wells Fargo analysts sees potential upside for Meta’s 2024/2025 earnings.

Details

"Expect marketing intensity by China x-border advertisers to sustain into '24, but see tailwind to Meta ad rev growth to meaningfully abate in the 2H driven by tough comps and ad spend diversification, the analysts wrote.

“Expect Meta’s positive revision cycle to moderate in '24, as company lapses multiple micro/macro tailwinds incl. x-border, Reels, and Advantage+, with new potential monetization initiatives yet to ramp up, e.g. Messaging, Threads and Meta AI.”

https://seekingalpha.com/news/4052005-pinterest-and-snap-are-wells-fargos-top-platform-picks-why-is-it-worried-about-google

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$400->$470, Buy: James Lee, Mizuho analyst, sees Meta’s 2024 consensus revenue growth as conservative compared to their 22% exit-rate, expects Meta’s opex guidance to decline throughout 2024 and sees messaging as an “attractive optionality.”

Details

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Buy, $370: Brian White, Monness Crespi Hardt analyst expects Meta to report an impressive fourth-quarter aided by AI innovations, secular digital trend and leaner cost structure. However,this year, he is worried about regulatory trends in Europe and U.S, cybersecurity attacks, and digital ad spending trends that could worsen as the economy slows.

https://seekingalpha.com/news/4054374-meta-expected-strong-q4-stunning-reversal-of-fortune

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Outperform, $380->$410: JMP Securities said their checks point to a healthy digital advertising market in Q4 2023 with the trend continuing to January 2024.

Details

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Buy, $425->$440: Analyst Ronald Josey of Citi expects Meta to report better than expected Q4 revenue and profit as Reels ad loads is ramping and newer ad products are driving demand.

“With the broader online advertising environment strengthening in 4Q, our Reels tracking suggesting 4Q ad load expanding (albeit at a slower pace), and our view that newer ad products are attracting greater demand,” he said.

“Our Reels ad load tracking suggests ad loads expanded to 19.1% in 4Q, +20bps Q/Q, and with Reels likely becoming revenue accretive in 4Q, we believe monetization efficiency through newer ad products and advertiser adoption is ramping,” he added.

https://seekingalpha.com/news/4057315-meta-may-see-sales-boost-reels-ad-load-ramping

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  • Buy, $425->$455: Analyst Brent Thill of Jefferies believes Meta will report strong results for Q4 and is positive on prospects for Q1 2024. “Most experts he spoke to saw a significant acceleration in advertising revenue growth in the fourth quarter, with it significantly exceeding expectations towards the end of the quarter.”

  • Buy, $390->$435: Seaport expects solid ad growth for Meta in Q4.

    Details

  • Buy, $375->$440: Loop Capital cited a number of positives for Meta including a possibility that Meta now has the largest AI compute infrastracture.

    Details

  • Outperform, $400: RBC said advertising trends remain strong.

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Overweight, $380->$465: Analyst Justin Patterson of KeyBanc believes Meta ended 2023 with further momentum in its ad products, especially Reels.

Details

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  • Buy, $575: Mizuho analyst James Lee expects Meta’s 2024 revenue to grow by more than 20% due to improving Reels monetization, geographic expansion, Amazon partnership with Shops and a unified ranking to maximize ads placements.
  • He also said longterm investments in WhatsApp and Llama could lead to a 65% upside in revenue per user over time.

https://seekingalpha.com/news/4080373-meta-platforms-rises-as-mizuho-adds-as-top-pick

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Buy, $550->$585: Jefferies analyst Brent Thill said Meta will capture additional market share in 2024 due to its many advantages over its peers.

“Firstly, the AI recommendation engine has continued to improve with Reels driving 25% growth in time spent watching video,” Thill said. “Secondly, the Advantage+ suite of ad tools have driven significant improvements in advertiser ROI well beyond competitors. Finally, Meta is seeing impressive momentum with click-to-message ads, which have already eclipsed a $10B+ run-rate as of Q4’22.”

“Based on our updated market share analysis, we believe Meta could capture 50% of incremental industry ad dollars in 2024, which would be its highest ever and well above its 33% in 2023,” analyst Brent Thill wrote. Ad revenue could grow at 20%, or more than twice the industry average of 9%, aided by generative AI, Thill added.

https://seekingalpha.com/news/4087207-meta-has-too-many-advantages-to-count-could-get-added-boost-from-ai-jefferies

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I=5, April 4, 2024

  • Wedbush Securities survey of 200 U.S based marketers across ad agencies and in-house advertisers established that U.S ad spending has increased “significantly” in 2024 compared to the end of 2023.

    “In 1Q24, 48% of marketers grew their digital advertising spend by at least 10% Y/Y, with ~12% reporting growth of over 20% Y/Y,” Wedbush analysts wrote in a note.

  • The analysts note that roughly 52% of advertisers plan to increase social spending by more than 10% in 2024, up from 42% in the previous survey.

https://seekingalpha.com/news/4087366-alphabet-meta-amazon-in-focus-wedbush-sees-significantly-increased-ad-spend

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  • Buy, $525->$590: Citi said it’s not seeing a drop in user engagement as Reels ad load expand.
  • According to their tracking, Reels ad load rose to 20% from 19.1% in the previous quarter while Instagram minutes per daily active user increased by 4%.

https://seekingalpha.com/news/4089660-citi-raises-meta-estimates-as-reels-engagement-grows-along-with-ad-load

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