Meta Platfoms: Morgan Stanley upgrades stock
(CercleFinance.com) - On Tuesday Morgan Stanley upgraded Meta Platforms shares to "overweight" from "equal weight", because of the more disciplined approach now favoured by the tech group.
In a note, the US broker justifies its optimism by the shift in focus of the former Facebook, which is now more focused on its efficiency and return on invested capital (ROIC).
The broker also praises the improving underlying trends in revenue, user engagement and monetisation of Reels, Facebook's short-form video format.
Morgan Stanley also believes that Meta could benefit from pleasant surprises in the artificial intelligence business, subscriptions and click-to-message ads.
It adds that Meta is the most resilient technology giant in the face of a possible slowdown in household consumption.
And even though the stock has jumped about 120% since its November lows, its valuation remains attractive, based on a discount of about 33% to its closest peers and a 30% discount to its long-term historical average.
Its new target price of $250, compared with $190 previously, also shows a upside potential of 27%.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
In a note, the US broker justifies its optimism by the shift in focus of the former Facebook, which is now more focused on its efficiency and return on invested capital (ROIC).
The broker also praises the improving underlying trends in revenue, user engagement and monetisation of Reels, Facebook's short-form video format.
Morgan Stanley also believes that Meta could benefit from pleasant surprises in the artificial intelligence business, subscriptions and click-to-message ads.
It adds that Meta is the most resilient technology giant in the face of a possible slowdown in household consumption.
And even though the stock has jumped about 120% since its November lows, its valuation remains attractive, based on a discount of about 33% to its closest peers and a 30% discount to its long-term historical average.
Its new target price of $250, compared with $190 previously, also shows a upside potential of 27%.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.