Meta Platforms
snagged a thumbs up from analysts at Edward Jones who support the company’s decision to trim spending on the metaverse.
Analyst David Heger lifted his rating on shares of Meta (ticker: META) to Buy from Hold in a report Monday, noting Facebook’s parent “is now focused on improved operating efficiency and has pulled back on its metaverse investment.” The analyst also said Meta will continue putting dollars toward bettering ad targeting.
“We think that its ad revenue could stabilize and return to modest growth by the end of 2023, which combined with the expense cuts, increases our earnings outlook,” Heger wrote.
In its most recent earnings report, Meta outlined cuts to its spending plan. Earlier this month, the company disclosed it will cut 10,000 jobs and cancel 5,000 unfilled openings, following the 11,000 layoffs announced in November.
The Edward Jones upgrade followed a price target increase from another Wall Street firm. Loop Capital analysts led by Alan Gould lifted their price target on shares to $220 from $188 in a report Sunday. The group maintained their Hold rating on the stock.
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Shares of Meta were up 0.9% to $197.30 on Monday.
Gould also pointed to possible upside for Meta if competitor TikTok gets banned. The Biden administration is considering a ban of the social media app if Chinese tech company ByteDance doesn’t sell the U.S. arm.
“META would clearly be a winner, but it is too early to model share win backs from TikTok,” Gould wrote.
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Write to Emily Dattilo at [email protected]
— to www.barrons.com
