Meta Platforms Inc. (META) PT Raised to $610 at JPMorgan

JPMorgan analyst Doug Anmuth raised the price target on Meta Platforms Inc. (NASDAQ: META) to $610.00 (from $480.00) while maintaining a Overweight rating.

The analyst comments "META shares traded up +7% post-close & we reiterate our Overweight rating, w/the company executing well near-term & we believe investing appropriately in critical L-T initiatives, notably AI. Healthy ad market trends supported strong 2Q results & have carried into 3Q, with/META’s 3Q revenue guide of +13%-20% (+15%-22% FXN) exceeding investor expectations. The 3Q revenue outlook implies ~1% of FXN decel from 2Q at the high end despite ~900bps tougher comps as Meta laps heavy China advertiser spending, Reels monetization ramp, & strong engagement tailwinds from 2023. Meta is showing early signs of progress across its AI ambitions, including core product enhancements around content & ads, new products such as MetaAI, & the Metaverse. Management continues to expect Meta AI to become the most used AI assistant by the end of 2024, & open source Llama 3.1 should support a faster pace of innovation, better social/advertiser experiences, & cost benefits. GenAI will require significant infrastructure investments to train the next generation of large foundational models & Meta is getting ahead of a multi-year capacity ramp, although core products will remain the primary driver of monetization through 2026. Meta reiterated its 2024 expense outlook of $96B-$99B and increased its 2024 capex outlook to $37B-$40B (prior $35B-$40B guide, +$2B at low end) as it accelerates infrastructure investments. Meta expects 2025 capex to increase significantly Y/Y, which we believe foots w/our view heading into earnings that 2025 capex would move toward $50B. We are increasing our 2024 capex +4% to $40B & our 2025 capex +21% to $52B. We increase our 2024 & 2025 revenue estimates by +2% & +6%, now exiting w/4Q24 revenue growth of +15% reported (+16% FXN), & we now project 2025 GAAP EPS of $25.08 & 2026 GAAP EPS of $29.07. We establish a December 2025 PT of $610 based on ~21x 2026E GAAP EPS of $29.07, which equates to ~25x 2026E FCF of $55B."

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