Meta Stock Surges Ahead of Earnings: Analysts Raise Price Targets

Meta Platforms (META) stock has been on a roll ahead of the company's fourth-quarter earnings report, with analysts from Wedbush and BofA Securities raising their price targets for the social media giant. The stock has gained 65% in 2024, outperforming broader indices and Alphabet (GOOGL), which gained 35% during the same period. This strong performance, driven by revenue upside and optimism on AI capabilities, has analysts bullish on Meta's future prospects.

Wedbush analysts, led by Scott Devitt, reiterated an outperform rating for Meta stock and raised their price target from 680 to 700. They cited "positive momentum into 2025" for the social media giant, highlighting Meta's strong revenue growth and cost discipline in 2024. Meanwhile, BofA Global Securities analysts, led by Justin Post, reiterated a buy call for Meta and upped their price objective to 710 from 660. Post noted the growing AI contribution to ad revenues, ramping messaging revenues, and continued cost discipline as key factors driving Meta's positive outlook.

Meta is expected to report its Q4 results late Wednesday, January 29. Analysts expect the company's earnings to increase 27% to $6.75 per share, according to FactSet, with revenue projected to increase 17% year over year to $46.98 billion. Wedbush's Devitt noted that advertiser feedback about the December-ended quarter indicates a "more modest deceleration" for Meta's year-over-year revenue growth than initially thought. Meta's revenue grew 19% year over year in the third quarter.

Investors are eagerly awaiting Meta's guidance for 2025 capital expenditures, with Wedbush's Devitt expecting the company to guide for about $51.4 billion. This would mark a 31% increase from the roughly $39 billion Meta is projected to have spent in 2024. Consensus estimates for 2025 capital expenditures have increased 9% since Meta's third quarter results in October and 42% from a year ago.

Meta's fourth-quarter results may take a backseat to the company's plans for the coming year, with investors focusing on 2025 expense/capital expenditure requirements. The cost debate has now shifted to 2025, and alongside 4Q results, Meta will share expense/capex guidance for the year. Investors will be watching closely for any surprises regarding 2025 expense/capex guidance, as any unexpected changes could impact shares.

In addition to the earnings report, investors are keeping an eye on the potential TikTok ban or ownership change. Analysts are making sense of what the loss of a major competitor could mean for Meta stock. BofA's Post noted that there is still uncertainty about Trump's executive order and the president's stated desire for a joint-venture where a U.S. company owns 50% of TikTok. The possibility for a ban still looms over TikTok, and analysts believe that any disruption to TikTok operations in the U.S. could benefit Meta in terms of user migration and ad spend shifts.

Meta stock has been on a tear, pushing higher into a 5% buy zone above a 602.95 flat base buy point, according to MarketSurge. Shares have also pushed higher above Meta's 21-day moving average. The social media stock has an IBD Composite Rating of 95 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating, with the best growth stocks having a Composite Rating of 90 or better.

As Meta prepares to report its Q4 results, investors are bullish on the company's prospects, driven by strong revenue growth, cost discipline, and optimism on AI capabilities. With analysts raising their price targets and investors focusing on the company's 2025 expense/capital expenditure requirements, Meta is poised to continue its upward trajectory in the coming year.