{"id":1185,"date":"2026-05-02T01:33:16","date_gmt":"2026-05-02T01:33:16","guid":{"rendered":"https:\/\/gw.adampg777.com\/?p=1185"},"modified":"2026-05-02T01:33:16","modified_gmt":"2026-05-02T01:33:16","slug":"bank-of-america-resets-meta-stock-price-target-following-earnings","status":"publish","type":"post","link":"https:\/\/gw.adampg777.com\/?p=1185","title":{"rendered":"Bank of America resets Meta stock price target following earnings"},"content":{"rendered":"<p><\/p>\n<p>Meta Platforms (META) delivered a quarter that most businesses would be happy to take.<\/p>\n<p>For perspective, Meta posted its Q1 earnings report on April 29, 2026, covering the quarter ended March 31, 2026.<\/p>\n<p>The headline numbers impressed, delivering another double beat, with operating income coming in much stronger than expected.\u00a0<\/p>\n<p>Unfortunately for the social media giant, Wall Street was focusing mainly on what&#8217;s ahead, particularly how it plans to continue building its AI future.<\/p>\n<p>Shares dropped 8% to 9% post earnings, and are down more than 7% year to date, despite being up 14% this month, according to Seeking Alpha.<\/p>\n<p>Nevertheless, Bank of America analyst Justin Post remained bullish.\u00a0<\/p>\n<p>He reiterated a buy rating on Meta while raising his price target to $835 from $820 on the back of the tremendous strength of Meta\u2019s core ad business and its growing AI opportunity.<\/p>\n<p>The problem is that AI is expensive.<\/p>\n<p>What overshadowed everything was Meta once again raising its capex to fuel its relentless AI buildout. Nevertheless, BofA backs the broader story, though it\u2019s becoming a case of near-flawless execution.<\/p>\n<h2><strong>Meta Q1 earnings at a glance<\/strong><\/h2>\n<ul>\n<li>Meta Platforms blew past Wall Street expectations on both the top and bottom lines, posting a superb GAAP EPS of $10.44, which beat estimates by $3.78, while revenue rose 33.1% year over year to $56.31 billion.<\/li>\n<li>Advertising was the primary growth driver, with ad sales jumping 33% to $55 billion, while Family of Apps sales skyrocketed 34% to $55.9 billion.<\/li>\n<li>Meta guided for Q2 sales of $58 billion to $61 billion, with the midpoint of $59.5 billion most in line with market expectations.\u00a0<\/li>\n<li>On top of that, it kept its full-year expense forecast unchanged at $162 billion to $169 billion, while lifting the capex outlook to $125 billion to $145 billion.<\/li>\n<li>Reality Labs remained a drag, losing a whopping $4.03 billion, while family daily active users slipped sequentially amid internet disruptions in Iran and WhatsApp restrictions in Russia.<br \/>\nSource: Seeking Alpha\n<\/li>\n<\/ul>\n<h2><strong>BofA sees Meta\u2019s AI spend paying off<\/strong><\/h2>\n<p>Meta\u2019s AI spending is massive, to say the least, but BofA analysts still feel the core business is strong enough to back it all up.<\/p>\n<p>At the core of it, BofA believes AI-driven gains are translated into the company\u2019s primary advertising engine, and will scale as large language models become more ingrained into the ad stack.<\/p>\n<p>It\u2019s important to understand that Meta isn\u2019t spending into a weak business.<\/p>\n<p>BofA sees 2026 revenue rising to $254.6 billion, with 2027 revenue climbing to $311.3 billion.<\/p>\n<p>The rationale has three major parts:<\/p>\n<ul>\n<li><strong>Better ads:<\/strong> BofA expects deeper LLM integration, which improves ad performance while attracting more incremental ad spending.<\/li>\n<li><strong>More shots on target:<\/strong> Threads, Meta AI, Marketplace, messaging, and subscriptions will create new monetization channels.<\/li>\n<li><strong>Attractive valuation:<\/strong> At about 18 times revised 2027 GAAP EPS, Meta currently trades below its 21 times historical average.<\/li>\n<\/ul>\n<p>The engagement numbers also help a ton.<\/p>\n<p>BofA notes that AI-powered recommendations led to a 10% increase in time spent on Facebook, while total video watch time jumped more than 8% globally in Q1.<\/p>\n<p>Consequently, BofA ended up raising its 2026 EPS to $34.12 and 2027 EPS to $34.46, which shows the company still sees Meta\u2019s tremendous AI buildout as an investment, rather than a problem.<\/p>\n<h3><strong>Meta earnings history<\/strong><\/h3>\n<p>Meta\u2019s recent earnings performance shows consistent beats across both lines, with sales hovering above 20% in each of the past four quarters.<\/p>\n<p>That said, here\u2019s how Meta has fared over the past four quarters.<\/p>\n<ul>\n<li><strong>FQ1 2026<\/strong>: EPS of $7.31 beat by $0.49, revenue of $56.31 billion beat by $755.41 million, and revenue grew 33.08% year over year.<\/li>\n<li><strong>FQ4 2025<\/strong>: EPS of $8.88 beat by $0.70, revenue of $59.89 billion beat by $1.42 billion, and revenue grew 23.78% year over year.<\/li>\n<li><strong>FQ3 2025<\/strong>: EPS of $7.25 beat by $0.58, revenue of $51.24 billion beat by $1.83 billion, and revenue grew 26.25% year over year.<\/li>\n<li><strong>FQ2 2025<\/strong>: EPS of $7.14 beat by $1.28, revenue of $47.52 billion beat by $2.68 billion, and revenue grew 21.61% year over year.<br \/>\nSource: Seeking Alpha\n<\/li>\n<\/ul>\n<figure>\n<p>                        <img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAyOTc1MTMy\/key-speakers-at-the-meta-connect-event.jpg?io=1&amp;profile=rss\" height=\"675\" width=\"1013\"><figcaption>Bank of America raises its Meta price target after earnings but flags heavy AI spending concerns ahead.<\/p>\n<p>David Paul Morris&amp;sol;Bloomberg via Getty Images<\/p>\n<\/figcaption><\/figure>\n<h3><strong>Wall Street price targets for Meta Platforms stock<\/strong><\/h3>\n<ul>\n<li>JPMorgan cut its price target on Meta Platforms to <strong>$725<\/strong> from $825.<\/li>\n<li>UBS lowered its price target on Meta Platforms to <strong>$865<\/strong> from $908.<\/li>\n<li>TD Cowen cut its price target on Meta Platforms to <strong>$800<\/strong> from $820.<\/li>\n<li>Bernstein lowered its price target on Meta Platforms to <strong>$850<\/strong> from $900.<\/li>\n<li>Truist cut its price target on Meta Platforms to <strong>$840<\/strong> from $900.<\/li>\n<li>Guggenheim lowered its price target on Meta Platforms to <strong>$800<\/strong> from $850.<br \/>\nSources: Benzinga, TipRanks\n<\/li>\n<\/ul>\n<h2><strong>Risks still hang over Meta\u2019s AI story<\/strong><\/h2>\n<p>Though for the most part, BofA\u2019s Meta call leans bullish, its long-term case (backed heavily by AI) comes with serious risks.<\/p>\n<p>The first and most obvious concern is spending.<\/p>\n<p>Meta Platforms just raised its capex to $125 billion-$145 billion, with BofA estimates at $130 billion for the year.<\/p>\n<p>For more color, according to GuruFocus, Meta\u2019s capex-to-operating-cash-flow ratio is 0.59, 48% higher than its 10-year median of 0.40.<\/p>\n<p>That level of investment works if AI continues improving engagement and ad performance, but also raises the bar for returns.\u00a0<\/p>\n<p>The second aspect to consider is flexibility.<\/p>\n<p>Meta still gets roughly 98% of its sales from digital ads, while we\u2019re seeing its fixed cost jump due to AI infrastructure and data centers.<\/p>\n<p>Supporting that is the fact that Meta stock is trading at 5.72 times its forward book value (showing how asset-heavy a business is), which is 201% higher than the sector median.\u00a0<\/p>\n<p>So if there\u2019s any slowdown in ad spending on the back of the macro backdrop, margins could take a big hit.<\/p>\n<p>Additionally, there\u2019s growing competition from OpenAI and incumbents, limited or virtually zero buybacks in Q1, and legal overhang from the youth-safety regulatory scandal, which is pressuring usage and monetization.<\/p>\n<p align=\"center\"><strong>Related: 5-star analyst delivers stunning Micron stock price target<\/strong><\/p>\n<p>#Bank #America #resets #Meta #stock #price #target #earnings<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Meta Platforms (META) delivered a quarter that most businesses would be happy to take. For perspective, Meta posted its Q1 earnings report on April 29, 2026, covering the quarter ended&hellip; <\/p>\n","protected":false},"author":1,"featured_media":1186,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[867,200,457,400,100,481,91,1196],"class_list":["post-1185","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-america","tag-bank","tag-earnings","tag-meta","tag-price","tag-resets","tag-stock","tag-target"],"_links":{"self":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/1185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1185"}],"version-history":[{"count":0,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/1185\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/media\/1186"}],"wp:attachment":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}