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Investors can have greater confidence in Meta Platform’ s outlook, Piper Sandler says. Analyst Thomas Champion hiked his price target Wednesday on Facebook’s parent company, saying the social media firm has been strengthening Reels and building out its artificial intelligence strategy. He also noted overweight-rated Meta continues to be his top pick in digital advertising. “We are now more confident in META’s re-acceleration and raise 2H23 revenue & out-year estimates. Our Ad Metrics data suggests pricing is weaker, but spend is holding up. Our view: we think META is ramping Reels inventory faster than anticipated,” Champion wrote. META YTD mountain Meta shares YTD Meta shares have already doubled this year, higher by 125% as the likelihood of a pause in interest rate hikes buoy the outlook for mega-cap tech stocks. The analyst’s $310 price target, raised from $270, implies 14% upside from Tuesday’s closing price of $271.32. Part of what’s driving the analyst’s bullish thesis is recently growing user time in Meta’s social media platforms, including rising impressions in Instagram Reels in the second quarter. Champion expects impressions, or the number of times a piece of content is seen, could jump about 30% year over year. Meanwhile, Meta’s AI strategy is helping increase the time users spend on its platforms, improving its suite of tools for advertisers and building out an AI ecosystem. “META is just now beginning to re-gain market share after ~2 years of declines,” Champion wrote. “We think AI investments, new product growth (Reels), TikTok issues, and adtech investments set the stock up well for 2H23 & into ’24.” Piper Sandler was not the only Wall Street firm hiking its price target on Meta. Wolfe Research on Tuesday also raised its price target to $330, from $300, implying Meta can rise 21% from Tuesday’s close. Analyst Deepak Mathivanan reiterated his outperform rating, saying the firm’s generative AI plans could “potentially benefit top-line growth over next few years.” —CNBC’s Michael Bloom contributed to this report.
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