Meta Platforms (META) will likely deliver a modest upside against consensus estimates when it reports its Q1 results on April 24, BofA Securities said in a note Friday.
BofA expects Q1 EPS of $4.48 on revenue of $36.4 billion, compared with Street estimates of $4.33 on $36.2 billion revenue. It also forecasts ad revenue rising 26% to $35.5 billion from a year ago, above estimates at $35.4 billion.
BofA analyst Justin Post also pointed to “some sentiment risk” on a year on year deceleration in the company’s Q2 revenue outlook because Q1 had benefits from favorable January comps, the Leap Year, Easter and forex effects.
“We remain positive on Meta and reiterate our thesis that Reels, Messaging, and AI driven ad improvements are still early, and could lead to positive product surprises & revenue momentum in 2024,” Post said.
“Moreover, with a large capex budget, internal AI supercomputer, inhouse LLM and custom AI chips, we think Meta’s AI assets are underappreciated in the stock price with stock at 16x core ’25 EPS.”
BofA reiterated its buy rating on Meta and $550 price target.