BofA lifts Meta Platforms (META) target on Reels monetization ramp and growing AI capabilities
The Meta Platforms (NASDAQ:) price target was raised to $425 from $405 at BofA on Thursday, with analysts at the firm reiterating a Buy rating on the stock.
After a strong 2023, Bank of America said the Reels monetization ramp and growing artificial intelligence capabilities at the company keep them constructive.
“With a favorable macro backdrop for advertising, Reels contribution turning positive in 2024, a large messaging revenue ramp in progress, strong AI assets driving results, and still plenty of costs to cut if needed, analysts remain constructive on the stock,” they explained.
The bank expects META to post a 4Q revenue and EPS beat with revenue growth at ~24%. Looking ahead, analysts think the stock can overcome revenue deceleration in 2024, with 4Q 2023 seen to be peak revenue growth.
“There is risk that revenue deceleration in 2024 will weigh on the stock,” said the firm. “Bulls suggest ’24 revenue will beat estimates and deceleration is expected/priced in the multiple, while bears may prefer perceived acceleration stocks with easier comps, including PINS/SNAP.”
“Analysts think Meta is in a solid position with IG usage growth leading the sector and see the Reels/Messaging/AI ad revenue cycle as still early given ad checks.”
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