Meta Raises Price Forecast to $800, Citing Strong Ad Trends and AI Momentum

KeyBanc analyst Justin Patterson reiterated an Overweight rating for Meta Platforms and raised the price forecast from $655 to $800, citing strong Q2 ad trends, stable macro conditions, and momentum in AI. He increased his 2025 and 2026 revenue and earnings estimates, anticipating a better-than-expected performance driven by resilient ad spending, improving travel trends, and a weakening U.S. dollar.

KeyBanc analyst Justin Patterson has reiterated an Overweight rating for Meta Platforms (META, Financial), raising the price forecast from $655 to $800. The analyst cited strong second-quarter ad trends, stable macroeconomic conditions, and momentum in AI as key drivers for the upward revision.

Patterson's updated target reflects a significant increase of 22.14% and indicates a positive forecast for the company's stock potential. The analyst maintained an Overweight rating, which implies that the stock is expected to outperform the average total return of stocks covered by the analyst.

KeyBanc anticipates Meta's second-quarter revenue to reach $45.3 billion, with third-quarter revenue expected to range between $45 billion and $47.5 billion. Despite raising revenue and EPS estimates for 2025 and 2026, the firm acknowledges potential hikes in capital and operating expenses due to investments in AI. However, Patterson views these factors as manageable, contingent on effective communication from management regarding AI returns.

Wall Street analysts forecast an average target price of $735.09 for Meta Platforms Inc (META, Financial), with a high estimate of $935.00 and a low estimate of $525.00. The average target implies an upside of 4.58% from the current price of $702.91. The consensus recommendation from 71 brokerage firms is currently 1.8, indicating an "Outperform" status.

Based on GuruFocus estimates, the estimated GF Value for Meta Platforms Inc (META, Financial) in one year is $544.27, suggesting a downside of 22.57% from the current price of $702.91.

Meta Platforms Inc reported a strong start to the year with a 16% increase in total revenue, reaching $42.3 billion. The company has seen significant growth in user engagement, with improvements to recommendation systems leading to increased time spent on Facebook, Instagram, and Threads. Meta AI has nearly 1 billion monthly active users, with strong engagement particularly on WhatsApp and Facebook.

The company is making strides in AI-driven advertising, with new models increasing conversion rates and more advertisers using AI creative tools. Meta Platforms Inc is expanding its AI and hardware capabilities, with Ray-Ban Meta AI glasses tripling in sales and new launches planned with Essilor Luxottica.

However, Reality Labs continues to operate at a loss, with a $4.2 billion operating loss reported for the quarter. The company faces regulatory challenges in the EU, which could impact its business model and revenue in the region. Increased infrastructure and hardware costs have led to a higher capital expenditure outlook for 2025, impacting financial flexibility. There is uncertainty in the macroeconomic environment, including potential impacts from changes in e-commerce regulations affecting advertiser spend. Meta Platforms Inc is experiencing capacity constraints in AI infrastructure, which could delay some product developments and testing.

In other recent news, Cantor Fitzgerald raised its price target on Meta Platforms Inc. to $828.00 from $807.00, while maintaining an Overweight rating on the stock. The firm expects Meta to report second-quarter 2025 results with upside to consensus estimates on both revenues and earnings per share, driven by outperformance in the core advertising business. Cantor Fitzgerald anticipates third-quarter 2025 revenue to indicate stable year-over-year growth with little deceleration, projecting approximately $47.5-48 billion at the high end of guidance.

Meta is making strategic hires to bolster its AI efforts, including two researchers from OpenAI, as part of its push to build a "superintelligence" group. The company continues to attract talent from major competitors like OpenAI, Anthropic, and Google (NASDAQ:GOOGL). ByteDance is developing mixed reality goggles to rival Meta’s planned product release in 2027.

References:

[1] https://www.gurufocus.com/news/2983401/keybanc-boosts-meta-platforms-meta-price-target-amid-revenue-projections-meta-stock-news
[2] https://www.gurufocus.com/news/2983897/keybanc-maintains-overweight-rating-on-meta-raises-price-target-meta-stock-news
[3] https://www.investing.com/news/analyst-ratings/meta-platforms-stock-price-target-raised-to-828-from-807-at-cantor-fitzgerald-93CH-4137606