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Investing.com - Guggenheim lowered its price target on Meta Platforms Inc. (NASDAQ:META) to $875 from $900 while maintaining a Buy rating on Thursday. According to InvestingPro data, Meta maintains a "GREAT" financial health score, with 10 analysts recently revising earnings estimates upward for the upcoming period.
The price target adjustment follows Meta’s second-quarter results, which showed accelerated revenue and profit growth. The company reported $20.4 billion in operating income, exceeding consensus estimates by 19%, with third-quarter revenue guidance similarly ahead of expectations. Meta’s impressive 81.77% gross profit margin and 26.49% return on assets underscore its operational efficiency.
Guggenheim attributed Meta’s financial strength to industry-leading advertising products, meaningful impact from AI-based tools, and a continued healthy advertising environment. Despite the price target reduction, the firm expressed confidence in the long-term return profile of Meta’s near-term investments.
Meta’s management maintained its 2025 spending guidance largely unchanged, while providing early projections for 2026 that exceed current consensus models. The company indicated operating expense growth acceleration and significant capital expenditure growth to approximately $30 billion incrementally in 2025.
At after-hours valuation of 14 times 2026 estimated EBITDA (excluding Reality Labs losses), Guggenheim expects investors will continue to view alignment with CEO Mark Zuckerberg’s five-pillar AI strategy as attractive, given its balance of near, intermediate, and longer-term goals. With a PEG ratio of 0.55, Meta appears attractively valued relative to its growth prospects. Discover more detailed valuation insights and 13 additional key tips with InvestingPro’s comprehensive analysis tools.
In other recent news, Meta Platforms Inc. reported second-quarter revenues of $47.5 billion, surpassing Wall Street’s expectations of $44 billion. This marks Meta’s largest earnings beat in several years, according to Scotiabank (TSX:BNS). Following these results, several firms have adjusted their price targets for Meta. Scotiabank raised its target to $685 while maintaining a Sector Perform rating. BMO Capital increased its target to $710, describing the results as "very strong" with revenue and adjusted EBITDA exceeding consensus estimates by about 6%. Susquehanna set a new price target of $900, noting Meta’s third-quarter revenue guidance, which projects 21% year-over-year growth at the midpoint. Morgan Stanley (NYSE:MS) also raised its target to $850, citing improvements in AI-driven engagement and monetization. DA Davidson increased its target to $825, highlighting strong ad growth as a significant factor. These developments reflect the positive reception of Meta’s recent financial performance and future guidance.
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