Citi analysts raised their price target for top pick Meta Platforms (NASDAQ:META) to $440 from $425 in a note Tuesday, maintaining a Buy rating on the stock.
Analysts believe the social media giant's newer ad products are attracting "greater demand."
"With the broader online advertising environment strengthening in 4Q, our Reels tracking suggesting 4Q ad load expanding (albeit at a slower pace), and our view that newer ad products are attracting greater demand," they explained.
"Our Reels ad load tracking suggests ad loads expanded to 19.1% in 4Q, +20bps Q/Q, and with Reels likely becoming revenue accretive in 4Q, we believe monetization efficiency through newer ad products and advertiser adoption is ramping," the analysts added.
Meta remains the bank's top pick across the internet sector for 2024 as they believe engagement continues to expand, with the company benefitting from a multi-year product roadmap across social, generative AI, and ad innovations as margins expand.
Ahead of Meta's earnings report on Thursday, February 1, Citi said it expects the company's results to be better than expected across both revenue growth and profitability.