Key points:
- Meta Platforms price target has been cut at Mizuho and KeyBanc
- On Monday, Morgan Stanley downgraded the stock
- Meta will report Q3 earnings on Wednesday
Meta Platforms (NASDAQ: META) shares fell at the start of the week, although the decline wasn't as significant as it could have been, with the stock clawing back the majority of its initial losses, closing the session at $129.72, down 0.22%.
The social media and metaverse company is set to report earnings on Wednesday, October 26, after the close, which we have previewed here. Ahead of the release, analysts have been adjusting their ratings and price targets.
On Monday, Morgan Stanley analyst Justin Post downgraded Meta Platforms to Neutral from Buy, cutting the firm's price target on the stock to $150 from $196 per share. Post also removed Meta from BofA's “US 1 List” due to the downgrade. The list is a collection of the best investment ideas from the firm's Buy-rated, U.S.-listed stocks.
Also Read: How to Buy Meta Platforms Shares
The analyst explained that while checks suggest Meta's third-quarter results will have “stability,” BofA's expectations for the fourth quarter and FY23 have been reduced due to advertiser budget cuts early next year, weighing on sentiment and creating uncertainty. Post estimates only 4% revenue growth in 2023 compared to the consensus expectation of 9%, while there is also “downside risk” to that view in a recession.
Elsewhere on Monday, Meta Platforms' price target was cut to $180 from $225 by Mizuho Securities. While the firm maintained a Buy rating, analyst James Lee believes sales weakness for Meta is expected in the third quarter. However, he explained that the likelihood of a meaningful operating expenditure growth cut in fiscal 2023 is uncertain.
Today, KeyBanc Capital Markets analyst Justin Patterson reduced the firm's price target on Meta Platforms to $175 from $196, keeping an Overweight rating on the shares. Patterson explained that increasing concerns about a downturn in 2023 have seen investors become increasingly skeptical of Street revenue growth at Meta Platforms and Alphabet. The analyst anticipates flattish-to-low single-digit EPS growth for Meta and believes progress with cost containment initiatives could reassure investors.
According to TipRanks, Wall Street analysts are primarily positive on Meta shares despite the recent downgrade and price target cuts. Out of 34 analyst ratings, 25 have a Buy rating on the stock, seven have Hold ratings, and just two have Sell ratings.
Still, Meta shares are down over 61% in 2022.