Meta Platforms Stock Has 18% Upside from a Wall Street Analyst

Meta Platforms firms(NASDAQ resonance stock code: META)The company's stock bottomed out in 2022, but has soared to new highs as the digital advertising market shows signs of recovery.Citigroup ) analysts believe that the growth in Instagram Reels user engagement will lead to higher revenues in the near term, which will further boost the stock price.

The firm raised its target price for Meta's shares to $590 from $525, nearly 18% above where the stock was previously trading at $500, while maintaining a Buy rating. Wall Street's target share price is typically an estimate of how much a stock will trade over the next 12 months, so Citi notes that Catalyst could have a positive impact on Meta's growth beyond 2024.

Is Meta stock worth buying?

Meta has been investing heavily in Artificial Intelligence (AI) to power content recommendations and advertisements across its application portfolio. As users see ads and content that are more closely aligned with their interests, more advanced AI models will directly impact how long users spend browsing for information.

Citi analysts highlighted the positive momentum of Instagram Reels, an ad load tracker. The bank's analysts cited Meta's recent progress in advertising innovations, such as artificial intelligence to recommend content, as well as growing advertiser demand for Reels. As a result, the analysts raised their revenue estimates ahead of the company's first-quarter results, which are scheduled to be released on April 24th. The Wall Street consensus estimate is for Meta's revenue to grow 18% year-over-year to $33.8 billion in the quarter.

Meta has had a strong year with double-digit revenue and earnings growth, and the analyst consensus estimate is that the company's EPS will grow by 35% this year.

The stock's forward P/E of 25 is attractive given the company's high earnings growth. It is certainly not a stretch to believe that the stock will climb another 18% in the next 12 months to reach Citibank's new target price.

Should you invest $1,000 in Meta Platforms now?

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Randi Zuckerberg, former Facebook Market Development Arbitrator and Spokeswoman, and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's Board of Directors. Citi is an advertising partner of The Ascent, a Motley Fool company. John Ballard has no position in any of the stocks mentioned above. The Motley Fool holds a recommendation for Meta Platforms. The Motley Fool has a disclosure policy.

A Wall Street Analyst Says Meta Platforms Stock Has 18% Upside was originally published by The Motley Fool.