On Monday, Stifel, a financial company, raised its price target on shares of Meta Platforms Inc. (NASDAQ:NASDAQ:) to €663, up from €590 previously. The firm maintains its buy recommendation on the stock. The revision follows positive indicators of the company’s performance, including strong momentum heading into the fourth quarter, despite rising costs per unit. impressions per thousand (CPM), a standard metric in advertising to indicate the cost of 1,000 ad impressions on a web page.
The Stifel analyst noted that advertisers continue to achieve required return on ad spend (ROAS) or better, indicating effective ad monetization despite CPM inflation. The report also highlighted the Advantage+ suite, Meta’s promotional product, which is still under-penetrated in the market. Positive feedback on the product suggests potential for increased use and therefore greater budget allocation for Meta’s offer.
In response to these results, Stifel adjusted its third-quarter revenue estimate for Meta to reflect a 19.2% year-over-year increase, which is at the high end of the company’s guidance. This is an upward revision from the previous estimate of a 17.5% increase year-on-year. For the fourth quarter, the company expects revenue growth of 15.5% year-over-year, up from 12.4% previously.
In addition, Stifel slightly lowered its overall consumption assumptions for Meta, bringing them closer to the middle of the company’s forecast range. This adjustment led to an increase in Meta’s GAAP earnings per share (EPS) forecast for 2024, now set at €21.37 compared to €20.63 previously. The GAAP EPS estimate for 2025 was also raised to €25.33 from €23.51. These revisions reflect the company’s confidence in Meta’s revenue growth and controlled expense management going forward.
In other recent news, Meta Platforms Inc. had its price target raised by Roth/MKM and Truist Securities, reflecting optimism about the company’s medium- and long-term prospects, despite a cautious stance on the upcoming third-quarter results. Roth/MKM raised the stock’s price target to €620, while Truist Securities raised it to €650. In addition, KeyBanc raised its price target for Meta to €655 and maintained an overweight recommendation influenced by advances in Facebook Reality Labs and artificial intelligence (AI).
Meta Platforms has also made significant progress in the fight against disinformation in Moldova, dismantling a network of fake accounts targeting Russian-speaking users in the country. This action is particularly crucial as Moldova prepares for its presidential election and a referendum on membership of the European Union.
In another development, Meta, along with other tech giants, proposed an alternative payment plan for data center electricity in Ohio. The proposal is a response to an ongoing dispute with the electric company AEP Ohio over energy consumption.
As S&P 500 companies begin their earnings reporting season, investors are closely watching the financial implications of AI investments. Meta’s AI investments are expected to significantly improve content ranking and recommendation systems, reflecting positive expectations for the company’s upcoming third-quarter results.
InvestingPro Insights
Meta Platforms Inc.’s strong performance, highlighted by Stifel’s analysis, is further supported by InvestingPro’s real-time data. The company’s market capitalization is an impressive 1.5 trillion euros, reflecting its dominant position in the technology industry. Meta’s revenue growth of 24.28% over the past 12 months is consistent with Stifel’s optimistic revenue expectations for the coming quarters.
InvestingPro Tips reveals that Meta has a perfect Piotroski score of 9, indicating strong financial health and operational efficiency. This score supports Stifel’s positive view of business performance and cost management. Additionally, Meta’s impressive gross profit margins, currently at 81.49%, highlight its ability to maintain profitability even while navigating an ad market with increasing CPMs.
The company’s P/E ratio of 29.44 and PEG ratio of 0.23 suggest that Meta may be undervalued relative to its growth prospects, which is consistent with Stifel’s decision to raise the price target. Investors seeking more comprehensive analysis can access 13 additional InvestingPro tips for Meta that provide a deeper understanding of the company’s financial position and market performance.
This article was generated and translated using artificial intelligence and reviewed by an editor. For more information, see our T&Cs.