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Meta Platforms shares target upped by TD Cowen on positive trends

EditorEmilio Ghigini
Published 07/10/2024, 08:42 AM
© Reuters.

On Wednesday, TD Cowen maintained a positive outlook on Meta Platforms Inc. (NASDAQ: NASDAQ:META) shares, increasing its price target to $600 from the previous $530 while keeping a Buy rating on the stock. The firm's optimism is based on encouraging signs of user engagement and advertising performance.

The adjustment in the price target comes after a review of second-quarter survey data and advertising checks, which revealed favorable engagement trends. According to the firm, these findings warranted an upward revision of revenue estimates for Meta Platforms by 1%-3% annually from 2024 to 2029. Additionally, the firm has adjusted its earnings per share (EPS) estimates upward by approximately 3% annually for the same period.

Long-term, TD Cowen projects a revenue compound annual growth rate (CAGR) of about 11% from 2024 to 2029 for Meta Platforms. This growth is anticipated to be driven by the company's artificial intelligence-led initiatives within its advertising business. The firm also notes the potential for further growth opportunities stemming from Meta's generative AI and business messaging developments.

The new price target of $600 reflects the firm's confidence in Meta's strategic direction and its ability to capitalize on these initiatives. The Buy rating remains unchanged, signaling the firm's continued endorsement of the stock as a favorable investment.

InvestingPro Insights

Amidst the upbeat outlook from TD Cowen, recent data from InvestingPro reinforces the positive sentiment surrounding Meta Platforms Inc. (NASDAQ: META). The company's robust financial health is highlighted by a market capitalization of $1.34 trillion and impressive gross profit margins, which stood at 81.5% over the last twelve months as of Q1 2024. These figures not only signify Meta's strong market position but also its efficiency in generating revenue relative to its costs.

InvestingPro Tips also shed light on Meta's valuation and performance metrics. The company is trading at a low P/E ratio relative to near-term earnings growth, with a P/E ratio of 29.73 and an even more attractive adjusted P/E ratio of 27.8 for the last twelve months as of Q1 2024. Additionally, Meta's PEG ratio during the same period is 0.25, suggesting that the stock may be undervalued given its earnings growth prospects. Furthermore, Meta's stock has experienced a significant price uptick, with a 6-month price total return of 43.36% and a year-to-date price total return of 50.04%, reflecting strong investor confidence and market performance.

For readers interested in deeper analysis and additional insights, InvestingPro offers a wealth of information, including 14 additional InvestingPro Tips for Meta Platforms. To access the full range of expert analytics and tips, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/META. This comprehensive tool could be invaluable in making informed investment decisions about this prominent player in the Interactive Media & Services industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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