JPMorgan analyst Doug Anmuth upgraded Meta Platforms to Overweight from Neutral with a price target of $150, up from $115. The shares are down 65% year-to-date as Meta has been impacted by Apple privacy changes, TikTok competition, Reels headwinds, heavy hiring and expense growth, an uncertain build-out of the metaverse, and macro pressures, Anmuth tells investors in a research note. However, heading into 2023, some of these pressures will ease, and most importantly, Meta is “showing encouraging signs of increasing cost discipline,” with “more to come,” says the analyst. He believes the stock’s valuation is now “compelling,” with the shares trading at 12-times his updated 2024 earnings per share estimate of $9.53. Meta is “building the muscle for more sustainable financial discipline” that can help drive further upward earnings revisions, and the risk/reward is attractive at current levels, contends Anmuth.
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