Analyst Raises Facebook Price Target by 32% as AI-Driven Advertising Strengthens

By Don Francis, Editor
February 10, 2024 9:45 AM UTC
Analyst Raises Facebook Price Target by 32% as AI-Driven Advertising Strengthens

Tigress Financial's Ivan Feinseth raised their price target on Facebook (NASDAQ: META) by 32.2% from $435 to $575 on February 9, 2024. The analyst maintained their Strong Buy rating on the stock.

According to Feinseth, Meta's success is expected to continue due to its ongoing AI-driven digital advertising strength and greater operating efficiency. This provides the potential for further upside, the analyst told investors.

Feinseth's positive outlook is supported by Meta's strong fourth-quarter numbers and first-quarter guidance, which demonstrated the company's continued benefit from broad advertising demand across its platforms, particularly in online commerce and gaming.

For the fourth quarter of 2023, Meta reported earnings per share (EPS) of $5.33, surpassing the Zacks Consensus Estimate by 10.35% and showing a significant increase of 203% compared to the same period in 2022, where EPS stood at $1.76. Moreover, the company's revenue for Q4 2023 reached $40.11 billion, exceeding the Zacks Consensus Estimate by 2.87% and marking a 24.7% increase compared to Q4 2022's revenue of $32.17 billion.

In terms of expenses, Meta reported total expenses of $23.7 billion for Q4 2023, which represented an 8% decrease year-over-year. Additionally, the company's capital expenditures (capex) for the same period amounted to $7.90 billion.

For the full year 2023, Meta's EPS reached $14.87, showing a noteworthy 73% increase year-over-year. The company's revenue for the fiscal year 2023 stood at $139.90 billion, reflecting a 16% increase compared to the previous year. Meta's total expenses for FY 2023 reached $88.2 billion, representing a 1% increase year-over-year. The company's capex for the same period amounted to $28.10 billion.

Looking ahead, Meta's management provided guidance for the first quarter of 2024, estimating revenue between $34.5 billion and $37 billion. For the full fiscal year 2024, Meta expects total expenses to range from $94 billion to $99 billion, with capex projected to be between $30 billion and $37 billion.

Founder and CEO Mark Zuckerberg commented on Meta's performance, stating, "We had a good quarter as our community and business continue to grow. We've made a lot of progress on our vision for advancing AI and the metaverse."

CFO Susan Li emphasized the company's focus on infrastructure investments, particularly in servers and data centers, as Meta ramps up construction on sites with its new data center architecture. Li also highlighted the company's commitment to long-term AI research and product development efforts, which may require growing infrastructure investments beyond 2024.

Li also acknowledged the potential impact of the regulatory landscape, including legal and regulatory challenges in the European Union and the United States. Notably, Meta is contesting a matter with the Federal Trade Commission that could impose additional restrictions on its operations and have adverse effects on its business.

Despite these challenges, Meta's strong performance and promising future have garnered positive sentiment among analysts. As of February 9, 2024, 100% of top-rated analysts rate META as a Strong Buy or Buy, with no analysts considering it a Hold or recommending selling the stock.

The consensus forecast among analysts is that Meta's upcoming year will deliver earnings per share (EPS) of $15.71. If the analysts' predictions prove accurate, META's next yearly EPS will experience a 3.5% increase on a year-over-year basis.

Investors have responded positively to Meta's recent performance, with the stock price rising by 18.6% since the company's latest quarterly report on February 1, 2024. Furthermore, on a year-over-year basis, the stock has surged by 163.1%, outpacing the S&P 500, which has risen by 23.2% during the same period.

Ivan Feinseth, the Tigress Financial analyst who raised the price target and maintained the Strong Buy rating on Meta, is ranked in the top 8% of Wall Street analysts by WallStreetZen. With an average return of 8% and a win rate of 55.8%, Feinseth specializes in the Technology and Consumer Cyclical sectors, among others.

Meta Platforms, Inc., formerly known as Facebook, Inc., develops products that enable people to connect and share through various devices, including mobile devices, personal computers, virtual reality headsets, and wearables. The company operates in two segments: Family of Apps and Reality Labs. The Family of Apps segment includes Facebook, Instagram, Messenger, and WhatsApp, providing platforms for sharing, messaging, and connecting. The Reality Labs segment focuses on augmented and virtual reality products, offering consumer hardware, software, and content to enhance connectivity and user experiences. Headquartered in Menlo Park, California, Meta Platforms, Inc. has a global presence.

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