Mizuho remains bullish on Meta Platforms (NASDAQ:META) heading into its upcoming earnings report, citing positive agency tracking for the first quarter of 2024, conservative expectations for the second quarter, and the potential for further operating leverage through increased efficiency.
The report highlights positive aspects beyond the upcoming earnings release. Analysts believe the current consensus forecast for full-year 2024 growth of 17% is likely too conservative, considering factors like improving ad pricing growth and product expansion in Facebook Shops, including the recent Amazon integration.
While capital expenditures could reach the high end of the company's guidance range, with a projected 30% increase, Mizuho expresses confidence in Meta's ability to manage operating costs and mitigate potential margin dilution.
Combined with what the report considers a compelling valuation level of 10x FY26E EV/EBITDA, Mizuho maintains a Buy rating for Meta, reiterates it as their top pick, and retains a price target of $575 per share. This bullish outlook comes despite acknowledging the generally positive investor sentiment and expectations surrounding Meta.