Key insights
- Morgan Stanley lowered its META price target to $775, citing ad market and AI concerns, but maintains an Overweight rating, seeing a buying opportunity as the stock trades at a discount. Potential cost savings from layoffs could boost EPS. Evercore ISI reiterated its Outperform rating with a $900 target. Regulatory hurdles are delaying the EU launch of Ray-Ban Display glasses.
Investing.com - Morgan Stanley lowered its price target on Meta Platforms Inc. (NASDAQ:META) stock to $775 from $825 while maintaining an Overweight rating.
Analyst Brian Nowak said Meta sentiment has reached a low point due to concerns about generative AI return on invested capital and long-term positioning, as well as macroeconomic advertising market conditions and regulatory uncertainties. The stock has dropped nearly 13% over the past week, trading at $525.72, well below its 52-week high of $796.25. According to an InvestingPro tip, the RSI suggests the stock is in oversold territory.
The company now trades at approximately 15 times Morgan Stanley’s 2027 earnings per share estimate of $36, which is one standard deviation below the long-term average. The firm views this as a strong buying opportunity. InvestingPro analysis indicates Meta is currently undervalued based on its Fair Value assessment, with comprehensive insights available in the platform’s detailed Pro Research Report for META.
Morgan Stanley’s 2027 EPS estimate accounts for potential macroeconomic weakness, with the firm reducing its 2026 advertising estimates by 1%. The estimate does not include potential savings of $3 billion to $7 billion from reported workforce reductions of 20%, which could add more than $1 to 2027 EPS.
The $775 price target represents approximately 50% upside from current levels, according to the analyst.
In other recent news, Meta Platforms Inc. is facing delays in the European launch of its Ray-Ban Display glasses due to regulatory barriers and supply constraints. The company had initially paused the launch in January, citing high demand in the United States, but now faces additional challenges in the EU market. Meanwhile, Evercore ISI has reiterated its Outperform rating on Meta, setting a price target of $900 despite concerns about the company’s legal exposure related to underage users. The firm estimates that users aged 8 to 13 account for a mid-single-digit percentage of Meta’s global daily users, which is against the platform’s policies. In other developments, Meta is reportedly in talks with Indian billionaire Gautam Adani for potential partnerships in Adani’s data center business. These discussions also involve Google and Walmart Inc.’s Flipkart. Additionally, President Donald Trump has appointed Meta’s CEO, Mark Zuckerberg, to his President’s Council of Advisors on Science and Technology, which includes leaders from the tech industry.
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