Meta Platforms (NASDAQ: META) has had a tumultuous year in 2022, with the company facing significant challenges from regulators, privacy concerns, and negative publicity. However, as the calendar turned to 2023, Meta’s stock price recovered significantly, winning back investors’ confidence.
But it’s not only investors that are regaining trust in the Facebook owner. On May 15, analysts at Loop Capital upgraded Meta’s stock to Buy from Hold, and raised the price target to as high as $320, from $220 per share.
Rob Sanderson set his price target to $320, which implies shares rallying 36.7% from their closing price of $233.81 on May 12.
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The move comes as analysts see a “much brighter revenue picture” for Meta going forward, they wrote in a note to clients.
“Three significant headwinds to revenue (Apple ad tracking changes, foreign exchange and transition to Reels) are all cycling through and set to become tailwinds. Combined we estimate these pressures had around mid-teens percent headwind to revenue growth.”
– Loop Capital’s Rob Sanderson wrote.
The broker was particularly upbeat about the Reels as a strong monetization opportunity for the social media giant. He said that the feature is currently growing at a quicker pace than its short-form video rival TikTok, thanks to its “best-in-class infrastructure and adtech.”
As a result, Loop Capital sees Reels as “another big flywheel for Meta” that could unlock significant revenue opportunities in social commerce.
Meta’s 90% stock surge in 2023
Over the past month, the stock has gained nearly 9% and a whopping 90.3% since the start of the year.
After a dreadful 2022, META saw a major rebound in 2023. The stock price received a substantial boost last month when the company reported sales growth of 3% during the first three months of the year, beating Wall Street estimates by some distance and ending its trend of three consecutive quarters of revenue declines.
Additionally, the number of monthly active users grew 5% year-over-year to more than 3.8 billion, while Facebook saw a 4% growth in daily active users to more than 2 billion.
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