Morgan Stanley Maintains Overweight, Raises PT to $750 from $650 on Meta.

Morgan Stanley Maintains Overweight, Raises PT to $750 from $650 on Meta.

Morgan Stanley has increased its price target for Meta Platforms (META) from $650 to $750, maintaining an Overweight rating for the stock. The adjustment comes as the firm updates its expectations for the internet sector, driven by a more favorable economic environment and reduced tariffs on China. Morgan Stanley has also adjusted its valuation approach, now looking towards mid-year 2026 [1].

The average one-year price target for Meta Platforms Inc (META) from 61 analysts is $737.46, with a high estimate of $935.00 and a low estimate of $525.00. This average target implies an upside of 4.71% from the current price of $704.28 [1]. The average brokerage recommendation from 71 firms is 1.8, indicating an "Outperform" status [1].

According to GuruFocus estimates, the estimated GF Value for Meta Platforms Inc (META) in one year is $544.27, suggesting a downside of 22.72% from the current price of $704.28 [1]. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at.

Meta Platforms Inc (META) 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 (META) is expanding its AI and hardware capabilities, with Ray-Ban Meta AI glasses tripling in sales and new launches planned with Essilor Luxottica [2].

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 (META) is experiencing capacity constraints in AI infrastructure, which could delay some product developments and testing [2].

Investors will be closely watching Meta’s next earnings report scheduled for July 30, 2025, and the launch of next-generation Llama models with potential reasoning capabilities. Morgan Stanley emphasized the importance of further generative AI productization to help investors understand the return on investment capital from Meta’s recent heavy hiring and capital expenditure investments as it adjusts part of its AI strategy [2].

References:
[1] https://www.gurufocus.com/news/2989136/meta-stock-target-raised-by-morgan-stanley-amid-improved-forecasts-meta-stock-news
[2] https://www.investing.com/news/analyst-ratings/meta-platforms-stock-price-target-raised-to-750-by-morgan-stanley-93CH-4143078