⌛ Did you miss ProPicks’ 13% gains in May? Subscribe now & catch June’s top AI-picked stocks early.Unlock Stocks

Citi bullish on Meta Platforms stock, eyes strong Instagram Reels engagement

EditorEmilio Ghigini
Published 2024-04-15, 05:50 a/m
© Reuters.
META
-

On Monday, Citi maintained its Buy rating on Meta Platforms Inc. (NASDAQ: NASDAQ:META) stock and increased the company's price target to $590 from $525. The decision follows observations of improved engagement and advertising load on the company's Instagram Reels feature.

According to Citi's analysis, Instagram Reels has seen a significant increase in advertising load in the first quarter, growing by 90 basis points quarter-over-quarter to 20%. Furthermore, data from Sensor Tower indicates that the average daily minutes spent per user on Instagram has risen by 4% year-over-year in the same period.

The firm attributes the sustained user engagement to Meta's latest advertising innovations, including advanced creative ads, reminder ads, and the introduction of longer-form Reels. Additionally, the implementation of a new AI video architecture has been noted as a factor contributing to the growing advertiser interest in Reels.

Citi highlighted that the top three advertising verticals on Instagram Reels during their tracking were Entertainment, Apparel, and Technology. The analyst pointed out that despite the increase in ad loads, user engagement has not been negatively affected.

Looking at the broader picture, Citi emphasized that the overall online advertising environment is showing signs of strength. With Meta's multi-year product strategy becoming clearer, the firm has expressed confidence in Meta's market position by designating it as their Top-Pick and adjusting their projections and price target upwards to $590.

InvestingPro Insights

As Meta Platforms Inc. (NASDAQ: META) continues to innovate and drive user engagement, particularly with Instagram Reels, real-time data from InvestingPro offers additional insights into the company's financial health and market performance. With a robust market capitalization of $1.31 trillion and a Price to Earnings (P/E) ratio of 31.06, Meta stands as a significant entity in the tech industry.

The company's revenue growth is also notable, with a 15.69% increase over the last twelve months as of Q1 2023, showcasing its ability to expand its income streams effectively. Moreover, Meta's Gross Profit Margin of 80.72% indicates a strong ability to retain earnings after the cost of goods sold is accounted for, which is essential for future investments and growth.

InvestingPro Tips reveal that Meta is trading at a low P/E ratio relative to near-term earnings growth and holds more cash than debt on its balance sheet, suggesting a stable financial position. The company is also recognized as a prominent player in the Interactive Media & Services industry. For readers looking to delve deeper into Meta's performance and potential, InvestingPro provides an additional 16 tips for a comprehensive analysis. To access these insights and enhance your investment strategy, you can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro's dedicated Meta page: https://www.investing.com/pro/META.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.