Meta Platforms stock could rally 30%, JPMorgan upgrades to Overweight

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By Senad Karaahmetovic

Shares of Meta Platforms (NASDAQ:META) are up about 2% in pre-market Friday trading after JPMorgan analysts upgraded to Overweight from Neutral.

The new price target on Meta stock is $150 per share, up from the prior $115, signaling an upside potential of nearly 30% relative to yesterday’s closing price.

“We recognize that shares are up 31% off their recent lows and sentiment has improved notably since the 13% headcount reduction & lower expense/capex outlooks. But we believe Meta is building the muscle for more sustainable financial discipline that can help drive further upward earnings revisions, & we believe the risk-reward is attractive at current levels,” the analysts said in a client note.

The upgrade call is fueled by five key drivers: Increased cost discipline, easing impact of Apple-driven signal loss in 2023, lapping heaviest TikTok pressures, more favorable revenue outlook on solid Reels monetization, and an attractive valuation.

The analysts note that Meta stock is down about 65% YTD due to “Apple privacy changes, TikTok competition, Reels headwinds, heavy hiring & expense growth, an uncertain build-out of the metaverse, & macro pressures.”

“Heading into 2023, we believe some of these top and bottom line pressures will ease, and most importantly, Meta is showing encouraging signs of increasing cost discipline, we believe with more to come,” they concluded.