By Angela Palumbo
Meta Platforms stock has more room to grow because users remain engaged with its social-media platforms even as the amount of advertising there increases, Citi says.
Analyst Ronald Josey increased his price target on Meta to $590 from $525 on Monday. That implies a 15% increase from the stock’s closing price on Friday. Josey also reiterated his Buy rating on the company, Facebook’s parent, and said the stock remains his top pick.
“With Meta’s newer ad innovations (Adv.+ Creative, Reminder Ads, longer form Reels, etc.), a new AI video architecture, and greater overall advertiser adoption, we believe advertiser demand for Reels (and Meta) continues to improve,” Josey wrote in a research note.
In 2023, Meta unveiled additions to its Ads Manager software suite that are intended to make it easier for advertisers to produce their content.
Josey said that increased advertising on Meta’s social-media platforms hasn’t made users pull back.
Advertising accounts for almost all of Meta’s revenue. The company reported ad revenue of $131.9 billion in 2023, which was an increase from the $113.6 billion reported the year prior. Total revenue for 2023 was $134.9 billion.
“Bigger picture, with the broader online advertising environment strengthening and Meta’s multi-year product strategy continuing to come into focus, Meta remains our Top-Pick,” Josey said.
Shares of Meta were up 1.3% to $518.78 in premarket trading Monday. Coming into the session, the stock had gained 45% this year.
Write to Angela Palumbo at angela.palumbo@dowjones.com