‘Earnings Growth Is Already Priced In,' Says Analyst after Dowgrading Meta Stock
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Furthermore, the launch of new ad formats on WhatsApp is expected to be another key driver in the years ahead. However, these projects will also lead to higher costs, including more depreciation, amortization, and employee expenses, which could slow down earnings growth despite stronger sales. Indeed, this trade-off between faster growth and higher expenses played a big role in Freedom Capital Markets' decision to adjust its rating.
Nevertheless, the firm remains optimistic about Meta's long-term potential, especially since it has a leading role in AI and the ability to make money across multiple platforms. As a result, the higher price target demonstrates that Freedom Capital Markets is confident in the firm's ability to continue growing. However, the downgrade to Hold is due to its concern that the current share price already includes much of the expected earnings increase.
Is Meta a Buy, Sell, or Hold?
Overall, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $872.50 per share implies 13% upside potential.
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