Meta Platforms Inc (META) shares are on the rise Thursday, fueled by positive analyst sentiment ahead of the company’s upcoming earnings report, due in two weeks. Multiple analysts have raised their price targets, suggesting a strong outlook for the tech giant.
One of the leading voices of optimism is Mizuho analyst James Lee. He maintained his Outperform rating for Meta, but significantly increased the price target from $600 to $650. Lee’s confidence stems from his belief that Meta will deliver a “beat-and-raise” quarter, exceeding both revenue and earnings expectations. He’s drawing this conclusion from a series of ad agency checks, indicating ad spending is currently outperforming consensus estimates and exceeding Meta’s own guidance for 20% year-over-year growth.
Lee highlights the strength in political advertising as a key driver behind this surge in spending. “Although the stock is a crowded trade into the print, we believe it is the only big tech internet name that could beat and raise with substantial optionality in messaging and Gen-AI for creative,” Lee stated. He believes Meta’s investments in messaging and generative AI offer significant potential for future growth.
TD Cowen analyst John Blackledge echoed this sentiment, also releasing a positive update on Meta on Thursday. He maintained his Buy rating and lifted the price target from $600 to $675. Both analysts are clearly betting on Meta’s strong performance in the third quarter, which will be reported after the market closes on October 30.
Analysts are expecting Meta to report earnings of $5.23 per share and revenue of $40.238 billion, based on estimates from Benzinga Pro. The company has a track record of exceeding expectations, having beat analyst estimates on both the top and bottom lines for six consecutive quarters, according to Benzinga data.
Meta’s recent performance has been strong, with revenue jumping 11% year-over-year and daily active users climbing 7% in the last quarter. The company reported a 34% year-over-year increase in ads delivered, though the average price per ad declined by 16%. “We had a good quarter. We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall,” CEO Mark Zuckerberg said in the second-quarter earnings release.
With analysts projecting a continued strong performance in the third quarter, Meta’s stock is poised for further gains. The company’s focus on AI, messaging, and new products, coupled with its strong ad revenue growth, suggests a bright future for the tech giant.
As of publication, META shares were trading up 0.11% at $577.44. Year-to-date, the stock has gained approximately 63%. The market is clearly paying attention to the upcoming earnings report, and Meta’s performance in the third quarter could further drive the stock’s upward momentum.
