By Senad Karaahmetovic
Wall Street analysts continue to weigh in positively on Meta Platforms (NASDAQ:META) as the social media giant prepares to report Q1 results.
Bank of America analysts hiked the price target to $250 per share despite being below the Street. BofA’s ad checks were “mixed” as spending likely decelerated.
Revenue is seen at $27.1 billion, below the $27.7B expected by Wall Street. EPS is expected at $1.94, also below the consensus of $1.99.
However, the analysts say Meta may guide higher-than-expected 2024 EPS on the back of the lower headcount and expense savings. Vox reported earlier today that Meta is set to cut 4,000 staff this week.
“For 2Q, we believe investor expectations are in line with Street and 2Q revenue guide could be in the range of $27.5-$30bn (BofA at $29.2bn vs Street at $29.6bn) as we would expect Meta to put some conservatism in 2Q outlook given macro uncertainty,” the analysts said in a client note.
Overall, they remain positive on META shares.
“While we think ‘23 recession uncertainty is likely to keep a lid on sector revenue estimates, we like Meta’s revenue set up for potential acceleration aided by Reels & messaging monetization, AI/ML targeting benefits and lapping IDFA comps. Also, TikTok threat is diminishing on lower advertiser adoption, while TikTok regulation could drive upside. Finally, we think Meta has less EPS risk (and more upside) vs peers on aggressive cost cutting.”
Wolfe Research analysts lifted the price target to $260 per share and reiterated a Top Pick designation on META stock.
“We think 1Q results and 2Q guide should reflect relatively stable demand environment and progress on growth initiatives/cost savings. Valuation is still compelling at current levels,” they said in a note.
Meta shares are trading lower in pre-market Wednesday on the layoffs report.