Citi Ups Price Target for Meta Platforms
The financial services corporation Citi has increased its price target for Meta Platforms from $315 to $360. This update was shared with investors on Tuesday, along with a sustained Buy rating for the stock.
Instagram Driving Engagement and Revenue Growth
According to the note shared by Citi analysts, Instagram's engagement and revenue are showing significant improvement. They have also noted a rise in the quarter-to-date ad loads on Instagram's Reels feature, hitting 17%, as indicated by the firm's exclusive tracking tools.
A Stable Online Advertising Market Sparks Positive Outlook
The online advertising market is maintaining stability and showing signs of improvement. This observation comes from Citi's presence at the Cannes-Lions Festival of Creativity last week. As a result, the analysts have increased their advertisement projections for 2024 and the price target for Meta, their preferred pick.
Increased Advertiser Adoption of Reels
Citi reports that Instagram's Reels feature has seen a quarterly rise in ad load from 16% to 17%. They believe the reason behind this growth is the increased advertiser adoption driven by Reels' Lo-Fi ad approach, new ad products, and ongoing user engagement growth. The growth is likely spurring more usage across various Meta platforms like Feed, Stories, Messenger, and WhatsApp.
Expectations for 2024 Ad Revenue Growth
Citi has projected that Meta Platforms will see a year-over-year advertising revenue growth of 14% in 2024. They are optimistic that Meta's investments in GenAI will contribute to incremental usage across its users, creators, and advertisers.