Meta founder and CEO Mark Zuckerberg speaks at the Meta Connect event at Meta headquarters in Menlo Park, California on September 27, 2023.
Josh Adelson | AFP | Getty Images
Yuan Shares rose 4.6% and climbed to a new all-time high on Thursday after analysts from both companies raised their price targets on the stock, citing optimism about the company’s growing market share in digital advertising.
Analysts at Jefferies raised their target price to $585 from $550 and said Meta’s revenue from the advertising market will increase this year. Analysts at RBC Capital Markets raised their target to $600 from $565 in a note on Wednesday. Of about 50 price targets tracked by FactSet, RBC’s estimate is tied with Wells Fargo and First Shanghai as the highest.
After a brutal 2022, Meta’s stock price has been soaring since early last year, when CEO Mark Zuckerberg declared that 2023 would be the “Year of Efficiency.” The company is seeking to slash costs, including cutting thousands of jobs, and will focus investments on improving its advertising business through artificial intelligence. Zuckerberg said in February that he planned to “keep it lean” going forward.
“Meta’s advantages are numerous,” Jefferies analysts wrote. Last year’s decision to invest $27 billion in capital expenditures “helped the company develop multiple strategic advantages over its peers.”
In addition, analysts said Meta could account for 50% of the industry’s incremental advertising revenue this year, up from 33% in 2023.They also predict that Meta’s growth may exceed expectations AmazonAdvertising business for the first time since 2015.
In recent years, Amazon has become a major player in the digital advertising space, as third-party sellers have been forced to spend heavily on the platform to promote their products and maintain their visibility among consumers.
In a report from Royal Bank of Canada, the company’s analysts highlighted Meta’s market share surpassing its largest rivals Google. They say they’ve seen some “advertiser resistance” to Google’s push for its Performance Maximization Ads, or “Pmax” campaign, which the company launched a few years ago to allow brands to automate ads across multiple platforms Buy.
Regarding return on ad spend and AI performance, RBC said, “META’s performance relative to GOOGL is the strongest we have heard.”
Analysts say Meta could benefit most from any payout as TikTok faces potential U.S. ban
Meta shares were up 2% at $517.30 as of Thursday afternoon. Shares are up about 46% this year after nearly tripling in 2023.
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