UPDATE: Facebook's (FB) IDFA Woes are a Bump in the Road to Metaverse, PT Raised to $400 at BofA Securities

BofA Securities analyst Justin Post raised the price target on Facebook (NASDAQ: FB) to $400.00 (from $385.00) while maintaining a Buy rating after the company reported revenue of $29.0bn, (+35% y/y) below the Street at $29.6bn. Ad revenue growth at 32% y/y ex-FX, decelerated 19pt q/q on an 11pt tougher comp. GAAP op. income was $10.42bn vs $10.98bn due to lower revenue flow through, but EPS was ahead on lower taxes. Most importantly, monthly active users (MAUs) of 2.910bn (+6%) was slightly below Street at 2.927bn, reflecting some international market saturation.

The analyst sees this as a one off quarter, stating "Key positives for quarter are IDFA headwinds may have peaked in 3Q, FB is guiding to better-than-feared 4Q q/q growth, and, despite big investments, core business EPS may be higher-than-expected in 2022 backing out FRL investments. We updated our SOTP valuation method to account for FRL disclosure, and raise our PO to $400 based on a new 16x P/E multiple on updated core business EPS, plus cash. At the $335 AH price, we estimate that core FB is valued at 12x ‘22 core FB P/E adjusting for messaging value, cash and FRL -- a value multiple for a double-digit growth company."

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