Rosenblatt Securities has adjusted its price target for Meta Platforms Inc. (NASDAQ: NASDAQ:META), increasing it significantly to $811 from the previous $643.
The firm maintains a Buy rating on the stock, signaling confidence in the company's growth prospects.
The adjustment follows Meta's recent Connect 24 event, which showcased advancements in virtual reality (VR), augmented reality (AR), and artificial intelligence (AI).
During Connect 24, Meta demonstrated its commitment to investing heavily in VR/AR technologies and the Metaverse, aiming to outspend any competitors in these areas. The event also emphasized Meta's ongoing progress in enhancing AI capabilities, which the analyst believes to be a key driver in the company's core advertising business.
The analyst's commentary points out that despite Meta's shares experiencing a significant increase — over 60% year-to-date (YTD) and 90% over the last twelve months (LTM) — the potential for further growth is not yet fully reflected in the current stock price. These figures are contrasted with the S&P 500's gains of 20% YTD and 32% LTM, highlighting Meta's outperformance.
The bullish stance is supported by a predicted adjusted earnings per share (EPS) compound annual growth rate (CAGR) of 34% from 2023 to 2025, excluding unusual charges but including stock compensation. The analyst argues that Meta's growth trajectory justifies a higher multiple, suggesting that the company could achieve a price-to-earnings (P/E) ratio comparable to Apple's, which stands at 30x forward EPS.
In other recent news, financial services firms Stifel, Baird, and JPMorgan (NYSE:JPM) have maintained positive ratings on Meta Platforms Inc., with Stifel reiterating a Buy rating and a price target of $590, Baird raising its target to $605, and JPMorgan increasing its target to $640.
These adjustments reflect confidence in Meta's focus on artificial intelligence (AI) products and its potential for growth. Analysts highlighted Meta's advancements in mixed reality, wearables, and developer tools, and the positive feedback from advertisers regarding Meta's marketing tools.
Furthermore, Citi has maintained a Buy rating for Meta, emphasizing the company's potential in AI innovation, and JMP Securities has raised its target for Meta, praising the company's AI-powered Orion glasses. Oppenheimer has also maintained an Outperform rating for Apple Inc (NASDAQ:AAPL)., despite the unveiling of Meta's AR glasses prototype, Orion.
In other developments, Meta is actively engaging with the European Union regarding the AI Act and has secured up to 3.9 million carbon offset credits, marking a significant step towards achieving net-zero emissions by 2030.
InvestingPro Insights
Following Rosenblatt Securities' optimistic outlook on Meta Platforms Inc. (NASDAQ: META), InvestingPro data further bolsters the case for the tech giant's robust financial health. With a market capitalization of $1.44 trillion and a P/E ratio standing at 28.42, Meta's valuation reflects its significant presence in the tech industry. Adjusted data from the last twelve months as of Q2 2024 show a P/E ratio of 26.66, highlighting the company's earnings strength relative to its share price.
The firm's gross profit margin is particularly impressive at 81.49%, underscoring its efficiency and ability to maintain profitability despite market fluctuations. This is complemented by a substantial revenue growth rate of 24.28% over the same period, indicating that Meta's investment in VR/AR and AI technologies is translating into tangible financial gains.
An InvestingPro Tip points out that Meta holds more cash than debt on its balance sheet, providing financial flexibility and stability. Additionally, Meta's prominent position in the Interactive Media & Services industry is recognized as a significant competitive advantage. For readers interested in deeper analysis, there are 15 additional InvestingPro Tips available, offering insights into Meta's financial performance and stock valuation, which can be found at: https://www.investing.com/pro/META.
The data and tips provided by InvestingPro suggest that Meta's current stock performance and future potential may indeed justify the bullish sentiment expressed by Rosenblatt Securities, offering valuable context for investors considering the company's shares.
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