Betting on Zuck’s Luck: Why Wall Street’s Finest Are Going All-In on Meta Stock Ahead of Earnings

Stocks to buy

Meta Platforms (NASDAQ:META) stock shines among the Magnificent Seven. The launch of LLaMA 3 signals ongoing innovation, likely propelling Meta’s market-leading growth.

Meta’s stock, lingering near $500 for weeks, closed at $499.76 on Tuesday. Optimistically ahead of Q1 earnings, analysts foresee the potential for shares to surpass $600. UBS upgraded Meta to a Buy, setting a $610 target, citing multiple growth factors.

Citi Analysts Are Optimistic for META

Citi (NYSE:C) analysts also recently upgraded Meta Platforms Inc. to buy, with a new price target of $590 per share. Analysts at this outfit attributed the optimistic view to increased engagement and advertising on Instagram Reels.

Instagram Reels advertising load increased to 20% in Q1.

User engagement is attributed to recent innovations such as creative ads, reminder ads, and longer-form Reels. AI video architecture also contributes to growing interest in Reels among advertisers. 

Citi highlighted Entertainment, Apparel, and Technology as top advertising verticals with unaffected user engagement despite increased ad loads. They view the online advertising environment as strong, boosting confidence in Meta’s market position. Their top pick is Meta with a price target of $590.

Meta Has Strong Financials

Meta Platforms runs a successful online advertising platform. Q4 2023 marked a successful financial year end for Meta, with impressive figures including over 35% profit margin, 25% revenue growth, and a 201% increase in net income. Annual revenue and net income both saw a 16% and 69% boost, respectively. 

Moreover, Meta’s broad set of apps like Facebook, Instagram, Messenger, and WhatsApp has over billion of users worldwide. The daily active user metric is now 3.19 billion, with monthly users at 3.98 billion. User activity is growing strongly and steadily.

The company experienced broad growth in daily and active users. Daily active users rose 8% yearly across platforms and 6% on Facebook. Monthly active users reached 3.98 billion. Facebook had 3.07 billion monthly active users. 

The stock doubled in a year, with analysts foreseeing further upside, rating it a Strong Buy with a projected 9% increase and a $600 per share target, suggesting a 20% rally.

Don’t Hesitate to Buy META Stock

Meta Platforms remains a dominant force in social media, with Facebook and Instagram under their belt. Their robust ad platform attracts businesses of all sizes.

Despite regulatory challenges, Meta explores AI for content moderation, notably LLM Llama 3. Financially strong after record FY23 revenue and FCF, Meta is poised as a top tech stock for 2024 and beyond.

Meta is set to release its earnings report on April 24, with analysts raising price targets. Stifel set its target at 588, while Piper Sandler sees potential for $600 per share. Analysts project sales at $36.11 billion, with earnings expected to rise 95% to $4.30 per share.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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