Citi analysts increased their price target for Meta Platforms (NASDAQ:META) from $425 to $440, while maintaining a Buy rating on the stock.
The bank highlighted the growing demand for Meta’s newer advertising products. The analysts observed an improvement in the overall online advertising environment in the fourth quarter, with indications that ad load in Reels, Meta’s video product, expanded, though at a slower pace. This expansion is reflected in Reels ad load tracking, showing an increase to 19.1% in the fourth quarter, a 0.20% quarter-over-quarter rise.
The analysts anticipate that Reels will likely contribute positively to revenue in the fourth quarter, underlining a ramp-up in monetization efficiency and advertiser adoption of new ad products.
Meta is favored by Citi as the top choice across the internet sector for 2024, with expectations of continued user engagement expansion. The company is believed to benefit from a multi-year product roadmap, encompassing social media, generative AI, and advertising innovations, alongside improving profit margins.
In anticipation of Meta’s earnings report scheduled for Feb 1, Citi expects the company to outperform forecasts in terms of both revenue growth and profitability.