Key insights
- Wells Fargo raised its price target for Meta Platforms (META) to $796, citing progress in AI, particularly the Muse Spark 1.3 model, and early signs of a new product cycle. Despite a reduced operating income estimate due to a legal settlement, the firm maintained an Overweight rating. Meta's stock is trading below its 52-week high, suggesting potential upside. The company is also advancing AI chip development with Broadcom, which BofA Securities highlighted positively.
Investing.com - Wells Fargo raised its price target on Meta Platforms Inc. (NASDAQ:META) to $796 from $640 while maintaining an Overweight rating on the shares. The stock currently trades at $665.75, about 16% below its 52-week high of $790.80, suggesting room for upside to the new target.
The firm kept its revenue estimates unchanged for the social media company. Wells Fargo reduced its 2026 operating income estimate by 12%, primarily due to a legal settlement with a $10 billion charge expected in the third quarter of 2026.
The firm trimmed its 2027 and 2028 operating income estimates by 1%. Wells Fargo revised its earnings per share estimates to $31.86 for 2027 and $38.75 for 2028, compared with prior estimates of $32.07 and $38.73.
The new price target is based on 25 times the firm’s 2027 earnings per share estimate, up from a prior multiple of 20 times—closely aligned with Meta’s current P/E ratio of 25.3. Wells Fargo raised the target multiple following the performance of Meta’s recent Muse Spark 1.3 model. According to InvestingPro analysis, the company maintains impressive gross profit margins of 81.75%. For deeper insights, investors can access Meta’s comprehensive Pro Research Report, one of 1,400+ available on InvestingPro.
The firm cited encouraging early signs of a new product cycle at Meta Platforms.
In other recent news, Meta Platforms Inc. faces legal challenges after a German court ruled the company is liable for fake advertisements posted by third parties on Instagram and Facebook. The court ordered Meta to remove the misleading content and pay damages, following a lawsuit by a German financial portal operator whose trademarked logo and image were misused. Meanwhile, Meta is advancing its technology with plans to deploy custom AI chips developed with Broadcom, expected to enhance compute efficiency. BofA Securities reiterated a Buy rating on Meta, highlighting these chip deployment plans. Additionally, Rosenblatt also reiterated a Buy rating, citing growth in Meta’s subscription service, Meta One, which has garnered 15 million trial and paid subscribers. In regulatory developments, BMO Capital Markets identified Meta as facing significant risk from global age verification initiatives, which are in early stages but gaining traction worldwide. These recent developments underscore the various challenges and opportunities Meta is navigating in its operations.
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