Normally, when analysts start offering positive signs around a stock, shares go up. This is usually the case, and why not? After all, an analyst’s plaudit tends to encourage investors. But even praise from Wells Fargo wasn’t enough to give Meta Platforms (NASDAQ:META) a boost, which is down nearly 2% in Monday afternoon’s trading.
Wells Fargo hiked its price target on Meta from $593 to its new level of $625 per share. Which is a nice raise, but why did it happen? Turns out Wells Fargo expects a “robust” performance in the second quarter. It also doesn’t hurt that Wells Fargo is looking for some big revenue news when Meta declares earnings and expects third-quarter revenue guidance to come in between $38 billion and $40.5 billion.
Some even point out that Meta is starting to back off from its “defensive” plays, and taking a few more risks that could pay off.
Not Without Challenges
This is certainly a positive sentiment, but not everything is running so hard in Meta’s favor. For instance, Meta announced that the word “Shaheed” had been allowed to come back, a move that some commentators call “…hugely regressing.” The word originally means someone who dies for their religion or a cause, but in the Israel-Palestinian conflict, it often refers to those who have attacked Israelis or Jews. This kind of controversy likely won’t do Meta’s advertisers, or investors, any favors.
Meanwhile, there are also signs that Threads, one of Meta’s latest platforms, is having a tough time drawing content creators. Most of them simply don’t consider Threads sufficiently worthwhile to post on, and that’s a serious problem. If there isn’t much content on Threads, then there’s very little chance it will draw views. No views mean no advertisers, and Meta misses out on a chunk of the market accordingly.
Is Meta Platforms a Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 37 Buys, three Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 80.51% rally in its share price over the past year, the average META price target of $528.53 per share implies 0.35% downside risk.
