Shares of Meta Platforms (NASDAQ:FB) are down 1.2% in pre-market Wednesday after several Street analysts were cautious on recent trends as the company prepares to report earnings later this month.
RBC analyst Brad Erickson lowered the price target to $240.00 per share from $245.00 to reflect lower estimates.
“Another round of SMB ad agency channel checks raises our conviction that FB is likely to see another rocky quarter upcoming prompting lower estimates and PT to $240. Digital ad spend decisions remain in flux with many SMBs considering new channels away from FB for the first time and we detected no perceived improvement to FB's targeting algo or performance. We'd expect some reversion at some point given FB's audience size and relative scaled conversion advantage (which keeps us at Outperform), but we see that narrative as unlikely to materialize near-term,” the analyst said in a client note.
Similarly, Oppenheimer analyst Jason Helfstein also cut the price target to $305.00 per share from $375.00 to reflect lower estimates, which mirror impacts from Russia, a weaker European economy, and continued headwinds to performance ad-targeting on FB/IG from IDFA impacts.
“Based on FB's CFO comments at the most recent industry conference, 1Q guidance was largely driven by softening e-commerce demand, since exacerbated in Europe, as Russia/Ukraine further affects consumer spending. Lowering 1Q22E revenue 4% and core EBITDA 6%. Lowering '22E/'23E revenue 9% each and core EBITDA 13%/10%, respectively. While shares may trade lower on earnings, we see short-term headwinds priced in at current levels, at 22x/14x '22E GAAP EPS/core EPS (ex. FRL), with potential upside from Reels and shopping products,” Helfstein wrote in a report.
By Senad Karaahmetovic