Meta Platforms (NASDAQ: META) shares surged almost 4% on Wednesday following a bullish new price target bestowed upon the company by Mizuho analysts.
Mizuho analysts have shed light on the stock’s phenomenal 194% surge in the past year and noted that Wall Street might still be underestimating the Facebook parent company. The financial institution also has revised its target price for Meta shares, increasing it from 400 to 470. The financial institution asserts that Meta, the social media behemoth, will beat revenue expectations this year.
Mizuho analyst James Lee penned the following statement,
“We believe that the fiscal year 2024 consensus revenue growth of 13% appears conservative, considering tailwinds from product improvements, increased engagement (AI content distribution), and rising demand of Chinese advertisers.”
Meta stock surged by an impressive 194% last year, and Mizuho’s target price implies a further 31% upside from Meta’s closing price on Tuesday. According to FactSet data, the revised target is among the most optimistic estimates for the company on Wall Street.
Mizuho forecasts Meta’s fiscal year revenue to grow about 15% year over year in 2024, reaching $153.5 billion. In addition, the firm anticipates Meta will continue to lower its guidance on operating expenses throughout the year, aligning with historical trends.
Meta Platforms (NASDAQ: META) had initially projected its operating expenses for 2024 to range from $94 billion to $99 billion, contrasting with the estimated expenses of $88 billion in 2023. The significant growth Meta experienced last year was partially driven by layoffs and cost-cutting initiatives, which Chief Executive Mark Zuckerberg referred to as a “Year of Efficiency.”
Mizuho thinks another factor that could boost Meta is utilizing WhatsApp and artificial intelligence for automated customer service. In October, Zuckerberg mentioned on an analyst call that business messaging might become a “next major pillar” for Meta.
Lee wrote,
“Based on our estimate, we believe that WhatsApp represents the largest potential given its large base of users of (more than) 2 billion and the room for monetization improvements compared to the overall Meta platform.”
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