META - Meta Platforms Q4 Earnings Preview: Underestimation Abounds For 2024

2024-01-26 09:00:00 ET

Summary

• The outlook of the online advertising industry has improved, with large events like the 2024 Paris Olympics and an elongated US presidential election cycle providing catalysts for upside.
• I show a 25% upside in 2024 EPS against consensus, providing a conservative price target of $435 based only on average historical valuations.
• While Q4 will mark an end to an important year, the Q1 and 2024 outlook provided by management on the upcoming call outweighs much of what could print for Q4.

Over the last several weeks, Meta Platforms ( META ) has more or less gone under the radar and found its way to new highs. At least until it broached the $1 trillion market cap level this week, then eyes shifted to its steady but still powerhouse move. But as Q1 has gotten underway, channel checks in the online ad market have returned quite positive and expectations have risen. This means Q4's earnings have quite a bit for shareholders as it wil set the stage for FY24 and provide not only Q1 guidance but expense and operating guidance for all of 2024. I expect a year of outperformance for Meta Platforms on the top and bottom lines as the industry gets a boost and Meta refines its AI approach....

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