Morgan Stanley sees path to $20 of 2024 EPS for Meta Platforms (META)

Morgan Stanley analyst Bran Nowak told investors in a note Thursday that they see a path to $20 of 2024 EPS for Meta Platforms (NASDAQ: META).

Nowak, who has an Overweight rating and a $375 price target on the stock, stated that their bottom-up ad analysis gives them higher confidence in their base case of 13% 2024 revenue growth and $18.50 in EPS "while also laying the path to $20 of EPS."

"The fact that Reels engagement is driving incremental time spent on the platform (we believe at a rising rate in 2Q:23) gives more confidence in Reels ability to drive META's ad revenue," the analyst wrote.

"Faster 'core' ad revenue growth and higher Reels monetization paint a path toward 20% '24 ad revenue growth and ~$20 of '24 EPS," he added. "Faster 'core' META growth and/or higher monetization of Reels can lead to further upside. Every 100bp of growth in META's 'core' would add ~1%
to EPS."

The analyst concluded that continued top and bottom-line upward revisions should drive upside and multiple expansion from the current ~16X '24 EPS trading level.

By Sam Boughedda

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