Meta shares jumped 25% Thursday morning, on pace for the best day in nearly a decade, coming on the back of a flurry of analyst upgrades, a fourth-quarter revenue beat and optimistic forecasts from CEO Mark Zuckerberg.
Meta shares sit at their highest point since September 2022, weeks before a disastrous third-quarter earnings report that prompted Wall Street analysts to openly question Zuckerberg’s leadership. There was a marked change in tone in analyst notes Wednesday night and Thursday morning, however, as the company beat top-line estimates with $32.17 billion in revenue.
“Does META really deserve to be up 20% in the after-market?!” Evercore ISI analyst Mark Mahaney posited. In one word, Mahan wrote, “Yes.” He cited “materially lowered expense estimates” and a larger-than-expected share buyback, raising his price target to $275 and reiterating an outperform rating.
Rosenblatt’s Barton Crockett raised his rating for Meta to Buy, setting a $220 price target and saying he was convinced by the current “critical” rating. At Guggenheim, Michael Morris revised his price target to $210, maintaining a buy rating, partly citing confidence in lower costs and management’s message on “momentum.”
Zuckerberg’s comments were well received by analysts, just months after the Meta co-founder took responsibility for laying off thousands of workers. “Our management theme for 2023 is ‘The Year of Efficiency’ and we are focused on becoming a stronger and more agile organization,” he said in a statement on Wednesday.
Zuckerberg, 38, has led the company’s pivot toward virtual reality, sinking billions into the Meta’s Reality Labs vertical. It’s a costly move that has earned him criticism from both analysts and activist investors, including Brad Gerstner of Altimeter Capital, who see the gambit as a distraction from the company’s core advertising businesses.