Lloyd Walmsley, UBS analyst, raised the price target from $280.00 for the Buy-rated Meta Platforms stock to $300.00.

Although the consensus price target is higher, it reflects higher 2023 earnings per share estimates of 6%. Lower opex costs result in higher EPS, despite Walmsley’s lower revenue estimates and comments regarding management.

We believe Street ests will fall in the preview season but this is something investors have been expecting. In a client note, the analyst stated that Instagram Newsfeed updates and improvements to Reels content/algo could drive engagement which we anticipate monetizing later in 2022 or 2023.

Walmsley refers to any improvements in engagement and/or commentary as factors that could push FB shares higher within the context of Q1 earnings reports.

While the timing is unclear, we think a ramp in Reels monetization, easing comps, and improvements in targeting/measurement can drive the multiple back towards its 3-year average of a ~9% premium to the , or 22x P/E (vs 16.8x on our GAAP 2023 est), the analyst added.

By Senad Karaahmetovic