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META wins price target raise at Roth

META stock

The glean is off Temu and Shein and that is good for Facebook (META Stock Quote, Chart, News, Analysts, Financials NASDAQ:META).

So says Roth MKM analyst Rohit Kulkarni, who in a research update to clients October 11 maintained his “Buy” rating and raised his price target on META from $550.00 to $620.00.

“We remain bullish on META’s medium-term and long-term prospects, however, we have an incrementally cautious stance heading into 3Q earnings,” the analyst wrote. “Three reasons: our channel checks were mixed for META; our survey plus analysis implies pullback from Chinese e-commerce advertisers; and we believe buyside expectations for a clean beat and raise quarter have minimal margin of error.”

Kulkarni thinks META will post EPS of $21.29 on revenue of $161.4-billion in fiscal 2024. He expects those numbers will improve to EPS of $24.26 on revenue of $183.3-billion in fiscal 2025.

“QoQ growth in ad spend in META’s APAC segment is based on customer HQ address. During 2Q23 and 3Q23, APAC revs increased by $1.26bn and $1.24bn respectively, and we estimate Temu/Shein accounted for >$1.5bn of this incremental spend,” the analyst added. “During 2Q24, APAC-based customer ad spend increased by $0.66bn, or a 50% decline vs. QoQ growth in 2023. We believe this decline is largely attributable to pullback in ad spend from Temu/Shein. Furthermore, recent 2Q revenue miss and slower growth in marketing spend at Pinduoduo, owner of Temu, likely hints at soft ad spend in 3Q/4Q”.

 

 

About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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