In a note this week, Wedbush raised its price target for Meta Platforms (NASDAQ:META) to $570 from $480, citing strong advertiser demand revealed in its latest digital advertising survey.
"Results from our survey were notably strong relative to our expectations for both Pinterest and Meta," stated the Wedbush note. They reached over 200 US-based advertisers, finding "strong advertiser demand through 2Q," particularly for Meta.
This positive trend builds on previous quarters. Wedbush highlights that "revenue from US-based advertisers has accelerated for five consecutive quarters." The survey also indicates continued momentum, with "44% of advertisers planning to grow spend by more than 10% Y/Y" in Q3.
Wedbush views this advertiser sentiment as a positive sign for Meta's future growth. "The relatively consistent Y/Y growth expectations in 3Q relative to 2Q is an encouraging data point for Meta," they note. This suggests a potentially softer deceleration in US advertiser growth throughout 2024.
Based on these findings, Wedbush increased its revenue and operating income estimates for Meta in both Q2 and for the full year. Their new Q2 revenue estimate sits at $38.4 billion, reflecting a 20% year-over-year increase. This represents a 2% rise from their prior estimate. They also project a Q2 operating income of $14.6 billion, exceeding their previous prediction.
Factoring in these adjustments, Wedbush maintained its Outperform rating for the company, impressed by Meta's continued growth in the digital advertising landscape.