BMO Capital analyst Brian Pitz initiated coverage on Meta Platforms Inc (NASDAQ: META) with a Market Perform rating and a price target of $397.
The re-rating reflected concerns about unforeseen growth headwinds into the second half of 2024.
The analyst advised investors to maintain positions soon, realizing the likely near-term upside from numerous favorable fourth-quarter 2024 tailwinds. However, he did not recommend allocating new funds to META.
Global digital advertising is increasingly competitive, with numerous well-capitalized companies and billions of engaged users.
Pitz noted that they are deep into The Age of the Content Creator; if scaled social media platforms do not evolve their revenue share models, they could risk material long-term losses.
TikTok remains a competitive threat to Instagram, although, in recent months, reel engagement has converged with TikTok, given some 2023 share loss.
The analyst projected 2023 revenue and EPS of $134.9 billion (vs. consensus of $133.6 billion) and $14.42 (vs. consensus $14.35).
Pitz initiated ...