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In this illustration photo taken in Los Angeles on October 28, 2021, a person watches on a smartphone Facebook CEO Mark Zuckerberg unveil the META logo. – Facebook chief Mark Zuckerberg on Thursday announced the parent company’s name is being changed to “Meta” to represent a future beyond just its troubled social network. The new handle comes as the social media giant tries to fend off one its worst crises yet and pivot to its ambitions for the “metaverse” virtual reality version of the internet that the tech giant sees as the future. (Photo by Chris DELMAS / AFP) (Photo by CHRIS DELMAS/AFP via Getty Images)
Facebook owner Meta Platforms is benefiting from a recovery in the European markets and new product initiatives that should accelerate revenue growth, analysts at KeyBanc wrote in a Wednesday note.
Meta (ticker:) stock was up 10.9% in the Thursday premarket after better-than-expected first-quarter earnings and revenue. In a year of cost efficiencies, the parent of social networks Facebook, Instagram, and WhatsApp, said it plans to be even more cautious on spending.
KeyBanc raised its price target on Meta to $280-a-share from $240. Lead analyst Justin Patterson, wrote: “Meta’s aggressive cost-cutting is now being met with accelerating ad revenue growth.”
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He raised estimates for 2023 and 2024 revenue by 3% and 2%, respectively.
“We now project revenue of $126 billion and $139 billion, respectively, which corresponds to 8% and 10% growth, respectively,” he wrote. “We also raise our 2023 and 2024 earnings-per-share estimates by 21% and 20%, respectively, reflecting our higher revenue forecast and increased expense discipline.”
Others have also raised their price targets for Meta Platforms, according to the Fly, with Goldman Sachs lifting its forecast to $300 from $245 saying its revenue-trajectory and cost-efficiency narratives continue to gain momentum. Piper Sandler raised its price target to $270 from $250.
Analysts at Citi reiterated their Buy rating and raised their target price to $315. “With engagement rising, newer ad products attracting incremental spend, and a more streamlined organization, we believe first-quarter momentum can continue and Meta remains our top online advertising pick,” analyst Ronald Josey wrote.
Write to Rupert Steiner at rupert.steiner@barrons.com