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Analysts revise Meta stock price targets after earnings

Analysts revise Meta stock price targets after earnings
Elmaz Sabovic

Among the standout performers dubbed the ‘Magnificent Seven,’ Meta (NASDAQ: META) shines with an impressive 42% year-to-date growth, fueling analyst optimism and setting high revenue targets for the second quarter. 

Analysts are bullish on Meta due to its focus on efficiency and profitability, exemplified by its recent introduction of dividend payments and its massive global reach, which engages nearly half the world’s population.

However, challenges such as rising interest rates and Wall Street’s skepticism regarding its Metaverse ambitions prompted CEO Mark Zuckerberg to swiftly realign the company’s strategy, emphasizing core strengths, cost reduction, and bottom-line focus, which was reflected on price charts. 

What were analysts saying after Meta posted a double beat in Q1?

In terms of revenue, Meta reported $36.46 billion, a 27% increase year over year, slightly surpassing the estimated $36.12 billion. Advertising revenue also saw a 27% rise year over year, reaching $35.64 billion, exceeding the estimated $35.57 billion. 

According to analysts, Meta is poised for continued strength in the future due to several factors, but the majority of price targets have been reduced. 

Goldman Sachs is bullish on Meta, noting its advantageous position in the advertising landscape. The firm anticipates continued investments in digital channels and the expansion of digital products, such as short-form video monetization exemplified by Instagram Reels. Goldman Sachs rates Meta stock as a ‘Buy’ with a 12-month price target of $500 from $555.

JPMorgan also holds a positive outlook on Meta, considering it a top choice among internet stocks due to its scale, growth trajectory, and profitability. The bank attributes Meta’s success to its strong competitive edge and user-centric approach. JPMorgan rates Meta shares as ‘Overweight’ with a $480 price target from $535.

Wells Fargo highlights Meta’s rapid growth, mainly driven by its advancing AI capabilities and a thriving e-commerce environment. Wells Fargo rates Meta as ‘Overweight’ with a $600 price target.

Bank of America emphasizes Meta’s undervalued AI assets and anticipates favorable revenue momentum fueled by enhancements in products like Reels and Messaging. Bank of America rates Meta as a ‘Buy’ with a $550 price target.

Meta stock slumps in pre-market due to missed expectations

Despite posting a double beat on expectations, Meta shares plunged to $431.13 as of the time of writing, notching a 12.64% decrease in the pre-market.

META stock 24-hour price chart. Source: Google Finance
META stock 24-hour price chart. Source: Google Finance

This loss likely stems from Meta Platforms’ tempered projections for Q2. Initially, Wall Street seemed displeased with these forecasts, leading to shares plummeting nearly 20% at one juncture. However, there has been a partial recovery since then.

This recovery looks set to continue in the coming days, as Meta Platforms remains one of the stock market favorites.

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