The outlook appears promising as Meta Platforms Inc. prepares to disclose its fiscal second-quarter results on Wednesday.
Impressive Analyst Sentiment Meta shares (META) have experienced an astounding surge in the past six months, resulting in a remarkable 144% year-to-date increase. This growth can be attributed to several factors. The company’s digital-advertising return on investment and efficiency have improved significantly. Moreover, investments in artificial intelligence have enhanced user engagement on Instagram. The introduction of the social-media platform Threads has gained considerable traction. Additionally, business has been picking up on Reels and WhatsApp.
Analysts Are Optimistic JMP analyst Andrew Boone recently raised his price target for Meta shares to $350, up from $300. Boone expressed confidence in the company’s future by maintaining an outperform rating and increasing estimates based on strong engagement trends and improved ad performance driven by AI technology. In a note to clients, Boone remarked, “We are positive on Meta’s fundamentals.”
Potential Challenges While the future looks promising, it is vital to keep in mind that the volatile tech industry is not without risks. Uncertainties surrounding the macroeconomy pose a potential danger to investments in artificial intelligence. Additionally, the initial fervor for Threads has substantially cooled off.
What to Anticipate
After the closing bell on Wednesday, the market will eagerly await Meta Platforms Inc.’s quarterly numbers.
Earnings
Analysts tracked by FactSet expect Meta to report $2.91 a share in earnings, up from $2.46 a share a year before. The average projection on Estimize also calls for $2.91 a share in earnings.
Revenue
The FactSet consensus calls for $31.1 billion in revenue, up from $28.8 billion the previous year. Contributors on Estimize also expect $31.1 billion in revenue.
Stock Movement
Meta shares have seen a remarkable 144% surge this year, with most of the growth occurring in the last six months. In comparison, the S&P 500 is up 18% in 2023.
Of the 55 analysts tracked by FactSet who cover Meta shares, 33 have buy ratings and 15 have hold ratings. The average price target is $309.31.
Digital Ad Spending
Investors are particularly interested in how digital ad spending has progressed for Meta, especially on Instagram. Reports from industry insiders suggest positive developments.
Jefferies’ Thill, who has a price target of $360, expects Meta to “accelerate revenue growth” due to favorable year-over-year comparisons, higher engagement from AI investments, and improved advertiser return on investment and efficiency.
Goldman Sachs analyst Eric Sheridan added that Meta shares “present a positive risk/reward” and the upward movement in the stock price reflects management’s shift towards a “year of efficiency,” as stated by Meta CEO Mark Zuckerberg.
