CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We keep our 12-month target of $350, based on a P/E of 18.7x our 2025 EPS view, below historical given regulatory/ad spend risks. We increase our 2023 EPS estimate to $13.35 from $12.30, and 2024’s to $16.44 from $14.75, and 2025 to $18.75 from $16. Our Buy reflects META’s attractive valuation, its slew of opportunities (AI, metaverse, Reels), and improving margin trajectory. Ahead of Q3 results on 10/26, we see ad growth of +20% in Q3/Q4 (an acceleration from +12% in Q2 and +4% in Q1), as digital ad trends have improved (ad revenue -4% a year ago). We project META retaking share via greater AI emphasis that is improving recommendations/rankings as well as targeting/measuring capabilities and see revenue contribution from Llama as we view AI agents as a long-term opportunity. We forecast DAU growth of 2%-4% for Q3 and through 2024, while a higher-than-expected capex/operating expense outlook could be a risk. Quest3 will drive upside to Reality Labs this holiday selling season but remains unprofitable.