Meta Platforms Inc. (META) PT Raised to $300 at CFRA, 'valuation remains attractive'

CFRA analyst Angelo Zino raised the price target on Meta Platforms Inc. (NASDAQ: META) to $300.00 (from $268.00) while maintaining a Buy rating.

The analyst comments "We increase our 12-month target price to $300 from $268 on a P/E of 20.4x our '24 EPS view, below META's historical average to reflect our view that digital ad growth rates are likely to be more tempered (mid- to high-single-digit percentage growth in the next three years). We up our '23 EPS to $11.90 from $10.33, '24 to $14.67 from $13.40, and '25 to $15.50 from $14.70. We have been impressed by META's recent initiatives to scale its AI infrastructure (see May 19 note), as its more AI-driven platform will have the ability to increase consumer engagement levels and ROI for advertisers. Although we believe cost cutting efforts are largely complete, we see upside from margins/earnings leverage as new headcount only incrementally grows (well below revenue growth). We think valuation remains attractive given net cash of about $34B (including long-term investments) and FCF potential (+30B in '24), while easier comps and growth initiatives (Reels, click-to-message ads, AI, metaverse) help sales accelerate in 2H.
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