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Meta Outperformance ‘May Take Time,’ Says Morgan Stanley -Breaking


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Sam Boughedda — Morgan Stanley analyst Brian Nowak lowered the price target on Meta Platforms Inc (NASDAQ:) to $325 from $360, saying in a note to clients that the company’s share “outperformance may take time.”

Meta shares rose 2.11% Wednesday

“Our bottom up analysis of Reels user adoption and monetization rates speak to larger near-term headwinds,” said the analyst, adding that there is, however, “direct evidence that FB will indeed successfully monetize Reels.”

 The analyst acknowledged that the shift towards Reels is “a larger near-term uncertainty.”

Instagram’s Reels product competes directly with the popular, video-focused social media app TikTok. 

We expect Reels advertising will ramp slower because FB prioritizes engagement over monetization. Accordingly, we anticipate a lower advertising load at the moment,” said Nowak.

“We are also mindful that TikTok’s materially lower monetization rate could be a factor impacting how quickly FB pushes advertising within Reels.”

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