Meta Stock Gets Trio Of Price Target Hikes Ahead Of Q4 Results But Retail Stays On Sidelines

A Meta Platforms, Inc. ($META) analyst upped the price target even as he remained cautious about the social media giant’s fourth-quarter results.

The Mark Zuckerberg-led company is scheduled to release its fourth-quarter results after the market closes on Jan. 29. Analysts, on average, expect the company to report earnings per share (EPS) of $6.74, up from $5.33 per share last year. Revenue is expected to rise 17% year-over-year (YoY) to $47.02 billion.

Wells Fargo analyst Ken Gawrelski on Sunday increased Meta stock’s price target from $641 to $685 and maintained an ‘Overweight rating. The revised price target suggests an upside potential of 11% for the stock.

Gawrelski said he remains cautious regarding Meta’s near term as the first quarter guidance can potentially disappoint. The analyst maintained his fourth-quarter forex-neutral ad revenue estimate but flagged a weaker exit-rate quarter for Meta advertising.

With forex likely trimming fourth quarter revenue by about $500 million, the analyst estimates quarterly revenue of $47 billion, roughly in line with the consensus. Citing checks that showed moderating ad spending and efficiency gains, he reduced the forex-neutral ad growth for the first quarter by one point to 16%.

The Wells Fargo analyst expects Meta to guide first-quarter revenue to $39 billion to $41.5 billion compared to the consensus estimate of $41.9 billion. He also calls for operating expenditure and capex guidance of $107 billion to $112 billion, respectively, for 2025.

Gawrelski said, ‘’We view FY25 as a transition year with slower impression growth, ahead of an improved product cycle.’’

Despite the estimate reductions, the higher price target is due to the higher multiples the analyst assigned to tech leaders.

The analyst sees Meta as an ‘’accelerating growth story with emerging upside AI options in messaging, ad tools and new consumer applications.’’ ‘’Combined with a newfound appetite for efficiency, we believe META should be a steady earnings compounder at a reasonable multiple,’’ he added.

Separately, Morgan Stanley and TD Cowen raised their respective price targets for Meta, with the former upping it to $660 from $600 and the latter from $695 to $675, TheFly reported.

In a separate development, a potential TikTok ban in the U.S. is likely to benefit Meta’s copycat versions of it, namely Facebook Reels and Instagram Reels.

On Stocktwits, retail sentiment toward Meta stock stayed ‘neutral’ (53/100), with message volume improving to ‘normal’ levels.

In premarket trading, Meta stock was down 1.50% to $606.60, apparently reacting to macro concerns. The stock has risen over 5% in January after ending 2024 up a solid 66%.

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