BofA lifts Meta Platforms (META) goal on Reels monetization ramp and rising AI capabilities
The Meta Platforms (NASDAQ:) value goal was raised to $425 from $405 at BofA on Thursday, with analysts on the agency reiterating a Purchase score on the inventory.
After a powerful 2023, Financial institution of America stated the Reels monetization ramp and rising synthetic intelligence capabilities on the firm preserve 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 defined.
The financial institution expects META to publish a 4Q income and EPS beat with income development at ~24%. Trying forward, analysts suppose the inventory can overcome income deceleration in 2024, with 4Q 2023 seen to be peak income development.
“There is risk that revenue deceleration in 2024 will weigh on the stock,” stated the agency. “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.”