Tuesday, Truist Securities updated its outlook on Meta Platforms Inc. (NASDAQ: NASDAQ:META), increasing the price target to $700 from the previous $650, with the stock currently trading at $624.24. The firm continues to recommend a Buy rating on the stock. The adjustment comes as Truist Securities extends its discounted cash flow (DCF) analysis by an additional year to better reflect Meta's long-term growth potential.
Meta's impressive performance is evident in its 87.1% return over the past year and strong financial health score of GREAT on InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ top US stocks.
In a statement released today, Truist Securities expressed confidence in Meta Platforms' ability to sustain a higher growth trajectory over an extended period. This optimism appears well-founded, given Meta's robust revenue growth of 23.06% and industry-leading gross profit margin of 81.5%. This optimism is based on the company's ongoing performance and strategic initiatives, which the firm believes will yield benefits in the coming years.
The decision to extend the DCF analysis to six years is a strategic move aimed at capturing the full scope of Meta's growth prospects. Truist Securities' unchanged estimates are bolstered by this extended forecast horizon, underpinning the new price target. For deeper insights into Meta's valuation metrics and growth potential, InvestingPro subscribers can access exclusive financial health scores, detailed ProTips, and comprehensive valuation analysis.
The analyst from Truist Securities elaborated on the rationale behind the price target increase, noting, "Extending our DCF by one year and bumping our PT to $700 from $650, previously. While our estimates remain unchanged, we are extending our DCF analysis by an extra year (6 years) to try to capture Meta's higher growth prospects in the outer years as the company continues to grow faster for longer. As a result, we've increased our PT to $700 from $650, previously."
The revised price target of $700 reflects Truist Securities' anticipation of Meta Platforms' sustained growth and its potential to outperform in the market. Investors and stakeholders of Meta Platforms will be monitoring the company's performance to see if it aligns with Truist Securities' projections.
In other recent news, TikTok's parent company, ByteDance, faces a potential divestment deadline set for January 19, 2025, as confirmed by President-elect Donald Trump. This follows a shift in Trump's stance toward the video-sharing platform, which he previously aimed to ban due to national security concerns.
Meanwhile, the Magnificent Seven, a group of leading technology companies, is expected to maintain market dominance into 2025, according to Nigel Green, CEO of deVere Group. These companies include Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA), Meta, and Tesla (NASDAQ:TSLA).
Additionally, Meta has donated $1 million to Trump's inaugural fund, signaling a shift in stance towards the President-elect. On another note, Xiaohongshu Technology Co., the company behind the popular Instagram-style app Xiaohongshu, anticipates doubling its profits to surpass $1 billion in 2024, indicating a strategic shift toward profitability.
Furthermore, Piper Sandler's PSC 2025 Ad Buyer Survey reveals an optimistic outlook for digital ad growth, with Alphabet Inc's Google identified as having strong potential to drive incremental spend in 2025. The survey also predicts that X/Twitter will gain the most social media market share in 2025, surpassing TikTok.
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