Meta stock: Oppenheimer discusses Trump/Vance risk, earnings, high expectations

Oppenheimer raised its price target for Meta Platforms (NASDAQ: META) shares to $525 from $500 in a note Friday, citing robust digital ad market conditions and sustained demand from Chinese advertisers.

Despite recent underperformance, the stock is now considered "derisked for print," with high investor expectations balanced by potential risks related to Trump and Vance.

Since the presidential debate, the firm notes that Meta's stock has lagged behind NASDAQ by 850 basis points.

This underperformance is attributed to "possible repeal of TikTok ban, tariff risk for China advertisers, and long-running feud with Trump&Vance views on regulating Big Tech," according to Oppenheimer.

However, the analysts remain optimistic about Meta's second-half prospects, bolstered by a strong digital ad market and continued demand from China.

Oppenheimer's revised 3Q estimates reflect ongoing demand from Chinese advertisers, with "US import volumes and shipping prices from East Asia to the US showing strong demand for China products," suggesting a favorable ad demand environment.

The firm also highlights the need for significant revenue acceleration in EMEA and China to meet Street expectations of +13% revenue growth for the second half.

The note points out that Meta's stock price underperformance is likely due to concerns about a Trump/Vance victory, which could negatively impact Meta by "allowing TikTok to continue operating in the US, tariff impact on China advertisers, and long-running feud between Trump/META and Vance views on regulating Big Tech/Section 230."

Despite these risks, Oppenheimer sees AI and ML improvements sustaining advertiser demand, leading to an increase in 2H revenue growth estimates to +11%.

Valuation adjustments are based on "23x 2025E GAAP EPS."

Oppenheimer concludes by increasing its revenue and GAAP EPS estimates for 2024 and 2025 by 1% and 2%, respectively, reflecting confidence in Meta's ability to navigate the current political and economic landscape.

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