Meta Platforms (NASDAQ:META)
The stock of Meta Platforms (NASDAQ:META), which represents a “compelling” risk/reward potential at its current levels, continues to be one of Citi’s top recommendations in the Internet sector, moving into earnings releases for the third quarter.
Analyst Ronald Josey believes that heading into the report, and expectations are “somewhat restrained.” This is due to industry discussion regarding engagement, social media rivalry, and monetization. “Meta stock is one of the most disputed stocks in our coverage universe approaching 3Q results,” he adds.
According to Josey, the wider online advertising environment improved during the quarter despite a worsening macro climate. With expectations lowered, Meta’s revenue and profitability will probably be in line with or slightly ahead of forecasts.
“That being said, we believe overall engagement and MSI (Meaningful Social Interactions) across Reels, Feed, Stories, and Messenger is improving as Meta stock rebuilds its Discovery engine, and we’ll focus on engagement across the platform,” says Josey. “Meaningful Social Interactions” refers to the interactions between users that are meaningful to them.
Given the macroeconomic environment volatility, Citi’s primary emphasis in the study is on providing expenditure projections for the year 2023. Following the announcement of a hiring embargo (which came after an attempt to reduce spending by 10%), the bank is seeking 2023 operational expenditure estimates in the “high $80 to low $90 billion range.” This compares to the current prediction made by the city, which is $93.8 billion.
Citi has a Buy rating and a target price of $222 on Meta stock, which indicates a 67% upside potential.
On Wednesday, October 26, after the closing bell, Meta stock will release the results of its third quarter. The general opinion among financial analysts is that the firm will announce normalized earnings per share of $1.87 on sales of $27.48B.
Meta Description
Even if earnings expectations have been “muted,” Citi recommends Meta stock as a top Internet pick.
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Author Shariq Khan 
