Investing.com -- Citi said Meta Platforms' (NASDAQ: META) $18 billion settlement with 52 U.S. state attorneys general over teen usage removes a major overhang, and that the operational hit should prove manageable.

"We believe Meta's $18B settlement (assuming YT & TT join) with 52 U.S. State AGs around teen usage removes a significant overhang in shares and comes at a time when Meta's AI product roadmap is emerging," analyst Ronald Josey wrote.

Under the consent order, 13- to 17-year-olds on Facebook and Instagram face a two-hour daily limit, alongside night and school usage blocks and prompts after periods of continuous use.

Citi argued the practical impact is limited. The average teen uses Instagram for around an hour a day, well inside the new cap, while teens account for less than 1% of Meta's revenue and are already excluded from interest, behavior and demographic ad targeting.

The bank also noted the figure came in far below what regulators initially sought. "The settlement is well below the $200B & $1.4T amounts that were initially contemplated by state AGs," Citi said, adding that it brings certainty and creates a framework going forward.

Citi added that Meta will take a $10 billion legal expense accrual in the third quarter, lifting 2026 expense guidance. Litigation risks remain, including New Mexico's appeal and roughly 1,200 school district cases.

Citi reiterated its Buy rating and $800 price target, flagging Meta Connect on Sept. 23 as a catalyst.