Meta stock was trading at $130.01 as of October 21, 04:00 PM EDT
Meta Platforms (NASDAQ:META) fell on Monday after Bank of America downgraded the tech giant because it was worried that advertising spending would be put under more pressure.
In light of checks into the consistency of ad revenue showing an in-line quarter, analyst Justin Post changed Meta’s (NASDAQ:META) rating from buy to neutral. Worries about budget cuts for next year and problems with SNAP (Supplemental Nutrition Assistance Program) income may make it hard to think clearly.
“While [fourth quarter] and 2023 forecasts have been reduced,” Post wrote in a letter to clients, “we expect advertiser budget constraints in early 2023 to weigh on sentiment and cause additional concern about post-IDFA adjustments and the Reels transition.” The analyst also reduced his $190 price objective for Meta (META) to $150.
The analyst also said that sales are only expected to grow by 4% from 2022 to 2023, to $120 billion. This is much less than what Wall Street wishes for, which is $127 billion, and there is “downside risk to our forecasts in a recession.” In premarket trade, Meta Platforms (META) fell a little more than 1% to $128.50.
Additionally, Post said there is a more cautious approach toward Reels consumption, particularly in light of “declining content consumption” on Snap (NYSE:SNAP).
“With total [Facebook and Instagram year-over-year] time spent being flat to slightly down per SensorTower in [the third-quarter], Reels use ramp is not proving to be additive, and time spent is likely down on more valuable social material, in our view,” Post continued.
META stock analytical forecast
The Post thinks that Meta (NASDAQ:META) will report revenue of $27.43 billion for the third quarter, which is about what was expected. Due to ongoing cost reductions, EBITDA may exceed forecasts. Citi said last week that Meta Platforms (NASDAQ:META) is still one of the company’s top picks in the internet sector going into third-quarter earnings because the risk-reward opportunity at current levels is “compelling.” The majority of analysts have favorable views on meta platforms (NASDAQ:META). Wall Street analysts rank it as a “Buy,” while the authors of Seeking Alpha have given it a “Buy” rating.
Meta Stock Outperforms The Market
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Author Jowi Kwasu 
