Wolfe Research has reiterated its positive outlook on Meta Platforms Inc. (NASDAQ: META), maintaining an Outperform rating and raising its price target from $670 to $730. Currently, Meta’s stock trades at $604.63, below its 52-week high of $638.40. Analysts attribute this bullish sentiment to anticipated financial gains from Meta’s video unification efforts and Threads monetization, which they believe are not fully reflected in current market estimates.
Wolfe Research raises Meta’s price target to $730, cites video growth’
Wolfe Research’s analysts project that Meta’s fiscal year 2026 earnings per share (EPS) will exceed consensus estimates by 5%, driven by video unification’s positive effects on advertising revenue. They estimate that Threads could generate between $3 to $4 billion in revenue by 2026, enhancing the monetization opportunities beyond that year.
In June 2024, Meta began unifying its video player across platforms, aiming to increase the share of short-form videos. As a result of these initiatives, Facebook’s video viewership has reportedly increased by 10% year-over-year. Furthermore, Meta’s introduction of full-screen immersive viewing in the UCAN region is set to expand further in early 2025. Wolfe Research forecasts that over 40% of the video content on Facebook will consist of short-form videos, monetizing at over $3 CPM with an ad load exceeding 30%.
The firm’s analysis also highlights that Meta’s 2025 EPS could surpass market expectations by 5.5%. The analysts maintain that the revenue potential from Threads has not been adequately factored into existing estimates, presenting an attractive mid-term monetization opportunity.
Alongside Wolfe Research, other analyst firms have expressed confidence in Meta’s future growth. JMP Securities increased Meta’s price target to $750 while maintaining a Market Outperform rating, and RBC Capital raised its target to $700. These firms emphasize Meta’s advancements in artificial intelligence and advertising capabilities as catalysts for growth.
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In addition to these developments, Nicholas Clegg, Meta’s president of global affairs, announced he would step down, and Joel Kaplan will succeed him. Kaplan, who has been with the company since 2011, is expected to take on significant responsibilities regarding content policies and elections.
On the market, Meta’s stock has seen significant gains, climbing nearly 77% over the previous year. Analysts anticipate that the company’s earnings for 2024 will reach $22.66 per share, with projected EPS expected to grow further in subsequent years, driven by ongoing AI initiatives.
Meta’s stock might look like a rocket ride to $730, but don’t slap the “guaranteed win” sticker on it just yet. Sure, Threads might rake in a few billion, and short-form video is the hot new cash cow—but what happens if CPMs tank or users decide they’ve had enough scrolling? Betting the farm on one shiny monetization play isn’t exactly a bulletproof strategy. And let’s not forget: AI isn’t a free lunch.
Also, Kaplan stepping into the big chair for content policies? Bold move, Meta. But new captains don’t always steer clear of icebergs. Everyone’s talking about how video unification is genius, but nobody’s asking how sustainable it is when competitors start undercutting ad pricing. This stock might be riding high now, but if even one piece of the puzzle wobbles, it could get ugly real quick. Keep your stop-loss tight, and maybe don’t YOLO into that $750 price target just yet.
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Featured image credit: Meta
