Citi says Meta shares to rally in near term on share gains, upcoming AI event By Investing.com

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Citi says Meta shares to rally in near term on share gains, upcoming AI event

Published Sep 22, 2023 12:58

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Citi analysts reiterated a Buy rating and a Top Pick designation in the internet sector on Meta Platforms (NASDAQ:META).

Moreover, a 90-day Positive Catalyst Watch has been opened on META stock in anticipation of the ‘Meta Connect’ event, which is due on September 27.

The analysts expect to hear more information about Meta's GenAI plans and results.

“We’ll be most focused on: 1) details around Meta’s GenAI Agent opportunity, which we believe can significantly ramp engagement; 2) Use cases for Meta’s GenAI Ad Tools & Features; 3) Insight on Meta’s Enterprise approach with Llama 2; 4) Productivity & Efficiency Gains from GenAI; and 5) Quest 3 & Metaverse Ambitions,” analysts said in a note.

In addition to the upcoming event, the analysts also reflected on the recent Reels ad load data.

“With Reels ad loads reaching 19% QTD vs. 17% in 2Q per our proprietary tracking, coupled with newer ad units, greater advertiser demand, and what we believe is an improving online advertising environment, we believe Meta is taking share of the broader online advertising market.”

“Our tracking suggests ad loads expanded to 18% in July, 19% in August, and ~20% in September and given our view that the leading SFV platform ad load is closer to mid-20%, we believe there remains upside as engagement grows and Reels’ Lo-Fi ad environment attracts more advertisers.”

The analysts' price target of $385 per share offers a 30% upside potential relative to Thursday’s closing price.

“[We] would be buyers on any material pull-back in shares,” they concluded.

Meta shares gained 1% in early Friday trade.

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