Meta Platforms Inc (META) is riding a wave of positive sentiment following its annual developer conference, Meta Connect, which saw the unveiling of several exciting updates. These updates included the launch of the $299.99 Quest VR headset, new developments in Meta AI, updates on the Ray-Ban Smart Glasses, and a sneak peek at the new Orion glasses. This flurry of activity has prompted several analysts to re-rate the company, with many expressing optimism about Meta’s future.
JMP Securities analyst Andrew Boone maintained his Market Outperform rating for Meta Platforms and raised the price target from $550 to $635. Boone’s confidence stems from Meta’s hardware and XR product roadmap, which he believes positions the company at the forefront of a new computing platform. He points to Meta’s progress in developing AR hardware over the past five years and suggests that Orion could represent the next primary consumer computing platform, mirroring the success of Microsoft’s desktop and Apple’s mobile dominance. Boone highlighted Meta’s Llama models, which have the potential to capture a share of search queries as usage increases, giving Meta the potential to monetize search given its existing relationships with over 200 million SMBs and 12 million active advertisers. The analyst also expects Meta to drive greater consumer adoption by continuing to lower hardware costs, evidenced by the $299 Quest 3S model. Boone predicts third-quarter revenue of $39.69 billion and EPS of $4.76.
Wedbush analyst Scott Devitt also maintained his Outperform rating for Meta Platforms, with a $600 price target. Devitt highlighted Meta’s progress in its AI product roadmap, with Meta AI on track to become the leading AI assistant globally by the end of the year. He emphasized the increasing synergy between Reality Labs investments and the core business, as AI becomes a central component of existing and upcoming hardware products.
Oppenheimer analyst Jason Helfstein reiterated his Outperform rating, setting a price target of $615. While he noted that this year’s Connect event was less impactful than last year’s AI-focused event, Helfstein acknowledged Zuckerberg’s significant focus on the company’s work with Ray-Ban and the fully holographic glasses demo.
Guggenheim analyst Michael Morris maintained his Buy rating for Meta Platforms with a price target of $600. Morris cited AR Insider data indicating that total Quest unit sales across the Quest 3, Quest 2, and Quest Pro are up 13.5% through the second quarter, with 64% of sales attributable to the Quest 3. He believes the $299 Quest 3S will drive incremental sales as a more economical entry point into the Meta VR/AR ecosystem. Morris also noted the continued growth in contributions from Meta’s smart eyewear, fueled by a new long-term agreement with Ray-Ban maker Essilor Luxottica. He sees Meta as a leader in AR/VR wearable devices with strong momentum heading into the holiday season.
Stifel analyst Mark Kelley reiterated his Buy rating for Meta Platforms, setting a price target of $590. Kelley sees the Llama announcements and Meta AI demos as highly encouraging, indicating Meta is well positioned in the AI race. He also noted that the Orion prototype demos illustrate the company’s broader Metaverse vision over the long term, suggesting that Reality Labs investments may taper off in the medium term as use cases begin to solidify.
Rosenblatt analyst Barton Crockett maintained his Buy rating for Meta Platforms, with a price target of $811. Crockett believes Meta’s Connect 2024 showcased how the company’s heavy investment in VR/AR and the Metaverse, coupled with strategic price-to-performance decisions, is leading to strong consumer adoption. He highlighted Meta’s continued advancements in AI, emphasizing its growing importance to the company’s core advertising business. He sees Meta as a potential growth story, with the potential to reach an Apple-like P/E of 30 times forward EPS. Crockett projects third-quarter revenue of $40.86 billion and EPS of $5.75.
KeyBanc analyst Brad Patterson also highlighted Meta’s progress in AI and mixed reality devices, stating that Connect was largely in line with his expectations. He remains encouraged by the progress of the Meta AI assistant and Llama models. While Quest and Glass (Ray-Ban, Orion) are still in their early stages, Patterson believes Meta’s AI capabilities and efforts to work more with developers will help differentiate the company from its competitors over time.
META stock closed down 0.51% at $565.44 at the end of trading on Thursday. This positive analyst outlook, driven by Meta’s Connect event, signals a promising future for the company as it continues to advance its technology and expand its presence in the Metaverse.
