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On Thursday, Citi analysts maintained a Buy rating for Meta Platforms Inc. (NASDAQ: NASDAQ:META) with a consistent price target of $655.00. The firm anticipates Meta to announce first-quarter earnings for 2025 on Wednesday, April 30, after market close, projecting results that are expected to meet or slightly exceed both their own and the consensus forecasts. Meta, currently trading at $520.27, demonstrates robust financial health with an impressive gross profit margin of 81.7% and a strong market position with a $1.31 trillion market cap. InvestingPro analysis shows the company maintains a "GREAT" financial health score, with particularly strong profitability metrics.
Despite acknowledging the current challenges in the online advertising market, including limited visibility into the second half of the year, concerns about advertising demand, and the potential impact of China’s market on profitability, Citi remains optimistic about Meta’s prospects. They cite the introduction of new advertising units like Andromeda and GEM, which have been improving conversion rates and ad quality, as well as the monetization of Threads and consistently strong engagement rates, as key factors supporting the company’s performance. The company’s financial strength is evident in its revenue growth of 21.9% over the last twelve months, with total revenue reaching $164.5 billion.
Citi highlights Meta’s product innovation cycle, including Meta AI, Search, Llama, AI Agents, and Reels, as a significant contributor to the company’s growth potential. The analysts believe that these products offer multiple avenues for expansion and, combined with Meta’s robust engagement and resilient profit margins, solidify the company’s position as their top pick in the Internet sector.
The firm’s reiteration of the Buy rating and price target reflects confidence in Meta’s ability to navigate macroeconomic pressures and continue to thrive in a competitive digital advertising landscape. Citi’s analysis suggests that Meta’s strategic focus on product development and monetization will play a crucial role in sustaining its market leadership.
In other recent news, Meta Platforms has announced the introduction of ads in its Threads app, expanding its advertising reach to over 300 million monthly active users. This move is part of Meta’s strategy to enhance business reach across its suite of apps. In a related development, Meta is broadening the availability of its AI assistant on Ray-Ban smart glasses to seven additional European countries, integrating live translation features to attract new users. Meanwhile, DA Davidson has maintained its Buy rating on Meta, with a price target of $650, despite challenges such as reduced digital ad spending and competition in AI. The firm believes that strategic adjustments could help Meta navigate these hurdles effectively.
Benchmark analysts have revised their price target for Meta to $640 from $820, maintaining a Buy rating ahead of the company’s upcoming earnings report. The analysts expressed caution due to a weakening global demand environment but remain optimistic about Meta’s long-term competitive advantages. They are particularly interested in updates on Meta’s retail media strategy and the impact of reduced advertising from China-based advertisers. These developments come amid broader economic concerns that are affecting digital advertising growth, a crucial revenue stream for Meta.
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