Meta Platforms stock jumps as top analyst upgrades ahead of earnings

Meta Platforms stock price popped by over 5% on Thursday, adding billions of dollars in value. It rose to a high of $647, up by 11% from its lowest level in November last year. This article explores why the META stock rose and what to expect ahead of the upcoming earnings.

Meta Platforms stock price jumped as analysts remained optimistic 

The main reason why the Meta stock price has rebounded is that analysts are upbeat about the company. In an update on Thursday, Brent Hill, a Jefferies analyst, reiterated his bullish outlook, with his target rising to $910. That forecast points to a 40% from the current level.

Most Wall Street analysts have maintained a bullish outlook, with Rosenblatt hiking the outlook to $1,117, up by 77% from the current level.

Similarly, Cantor Fitzgerald analysts boosted the target for Meta stock price from $720 to $750, while Citizens expects it to rise to $900.

However, some analysts have lowered their targets in the past few days, with Guggenheim reducing the target from $875 to $800. Others who have lowered the outlook are Baird, Wedbush, and Morgan Stanley.

As a result, the consensus price target for the Meta Platforms stock price stands at $821, with 41 analysts having a buy rating and 7 of them having 7 hold ratings. The consensus target is 26% above the current level.

Meta Platforms stock price also jumped after the company announced a new round of layoffs in a bid to cut costs. Data shows that the company will lay off 331 workers in Seattle and 270 in California. Most of these workers are from its Reality Labs business.

Additionally, Meta stock jumped after the company announced plans to start monetizing it Threads product through advertising. 

Meta earnings ahead 

The next key catalyst to watch will be the upcoming earnings, which will provide more information about the company and its growth.

Wall Street analysts are optimistic that Meta’s revenue and profitability growth continued in the fourth quarter as the advertising business boomed. 

The average estimate is that the company’s revenue rose by 20% in the fourth quarter of last year to $58.3 billion, while its earnings-per-share (EPS) rose from $8.02 to $8.2. If accurate, analysts expect that the annual revenue rose by 21.2% to over $200 billion.

Meta Platforms is expected to continue growing this year, rising by 18% to $235 billion. This growth will continue growing even as its key products continue to deteriorate.

For example, Meta Platforms’ Facebook is widely seen as a platform for old people, while Instagram is facing substantial competition from other fast-growing social media platforms like TikTok. Additionally, WhatsApp has become more difficult to monetize despite its popularity.

Most importantly, there are signs that Meta Platforms’ entry into the artificial intelligence industry has yet to become successful, with its chatbots having a negligible market share compared to xAI, ChatGPT, and Claude. 

Meta stock price technical analysis 

Meta stock chart | Source: TradingView 

Technical analysis suggests that the META stock price could be on the verge of a strong rebound in the coming weeks, potentially after the recent earnings. 

It has formed a double-bottom pattern at $598 and a neckline at $710, its highest level in December last year  

Meta Platforms stock has also formed an island reversal pattern, which happens when an asset makes a big gap. In most cases, this gap leads to a bullish reversal.

Therefore, the most likely scenario is where the stock rebounds, potentially to $700 and above after its earnings. However, a drop below the key support at $598 will invalidate the bullish outlook.

The post Meta Platforms stock jumps as top analyst upgrades ahead of earnings appeared first on Invezz