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On Thursday, Morgan Stanley (NYSE:MS) exhibited confidence in Meta Platforms Inc. (NASDAQ:META), as the firm’s analysts increased the tech giant’s price target to $650 from $615, while reiterating an Overweight rating. According to InvestingPro data, analysts maintain a strong bullish consensus on Meta, with price targets ranging from $448 to $935. The adjustment reflects a positive outlook on the company’s earnings potential, despite ongoing economic uncertainties.
The analysts at Morgan Stanley highlighted Meta’s robust performance, emphasizing its expansive reach, effective return on advertising investments, continuous innovation, and solid advertiser base as key factors driving the company’s success. InvestingPro data reveals Meta’s impressive gross profit margin of 81.68% and an overall financial health score of "GREAT," supporting the company’s strong market position. In response to these strengths, the firm has slightly increased its advertisement revenue estimates for the years 2025 and 2026 by 1% each.
Morgan Stanley’s revised projections also include an 8% rise in Meta’s earnings per share (EPS) for 2025 and a 4% increase for 2026. The company’s strong performance is evident in its 21.94% revenue growth over the last twelve months, with current diluted EPS at $23.86. However, the analysts noted that free cash flow (FCF) is expected to decline by 3% due to higher capital expenditures, which may not fully translate into revenue growth given the current macroeconomic challenges.
The analysts drew parallels with Alphabet Inc. (NASDAQ:GOOGL), suggesting that any significant improvement in macroeconomic stability, such as a resolution to trade tensions with China, could present further upside to their estimates for Meta. They remain Overweight on Meta’s stock, indicating their belief that the company’s market value will outperform the average market return over a specified time horizon. For deeper insights into Meta’s valuation and growth potential, including 12 additional ProTips and comprehensive financial analysis, check out the full research report available on InvestingPro.
In other recent news, Meta Platforms Inc. reported impressive financial results for the first quarter of 2025, with earnings per share (EPS) of $6.43, surpassing the forecasted $5.24. The company’s revenue reached $42.31 billion, exceeding expectations of $41.48 billion. Analysts from Barclays (LON:BARC) noted that Meta’s first-quarter revenue and earnings per share were ahead of consensus by 2% and 23%, respectively. Meanwhile, Goldman Sachs raised Meta’s price target to $690, citing confidence in the company’s strategic direction and growth potential, particularly in AI and spatial computing. MoffettNathanson also lifted Meta’s stock price target to $605, maintaining a Buy rating, while highlighting Meta’s operational efficiency and new technology adoption. Despite these positive developments, MoffettNathanson expressed concerns about a potential slowdown in advertising growth due to external factors. Additionally, Barclays adjusted Meta’s price target to $640, maintaining an Overweight rating, and emphasized the company’s strong performance in digital advertising. These developments underscore Meta’s focus on AI integration and its strategic investments in computing infrastructure.
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