Meta Platforms (NASDAQ: META) is set to post earnings for its latest quarter on Wednesday after the market closes, and judging by its recent share price rally, investors are expecting some positives.
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Meta shares are up more than 23% so far this year and over 30% in the last month, trading around the $151 mark.Â
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Ahead of Wednesday’s release, Piper Sandler analyst Thomas Champion said last week that Meta's 2023 expenditures could come in below expectations, lifting earnings and free cash flow forecasts.
Champion, who lifted his firm’s price target on Meta to $136 from $116, maintaining a Neutral rating, added that “evidence of potential upside is mounting” due to Meta’s headcount reduction and recent articles indicating that the company's $2 billion in data center spend is cancelled or on hold. Even so, that analyst believes Meta’s sales growth is still challenged.
Meanwhile, Credit Suisse analyst Stephen Ju recently raised the firm’s price target on Meta shares to $180 from $145, keeping an Outperform rating on the stock.
Ju told investors in a research note that automation/AI-driven ROI improvements found in product innovations such as Advantage+ and the ramp in marketer traction from the third quarter to the fourth quarter of 2022 shape the building blocks of what the firm expects to be gradual improvements to Meta's revenue growth.
MKM Partners analyst Rohit Kulkarni raised the firm's price target on Meta to $155 from $140 just over a week ago, maintaining a Buy rating on the stock. Kulkarni, citing data from his first proprietary ad agency survey, said buyers appear to have a positive forward outlook on spending in 2023-2024, with YouTube and Instagram expected to experience the largest increase in budget allocation.
The analyst added that Meta’s near-term stock trend is likely to be based on how low its management goes on the 2023 operating expenditure guidance. Kulkarni stated that if the company cuts OpEx by over $2 billion and CapEx by over $1 billion, Wall Street would view this as a positive.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.