What Wall Street is saying about Meta ahead of earnings

Meta Platforms (META), the parent company of Facebook, Instagram, WhatsApp, Oculus, Threads and other brands, is scheduled to report third quarter 2024 results after market close on Wednesday, October 30 with a conference call scheduled for 5 pm ET. Here’s what to watch for:

EXPECTATIONS: Last quarter, Meta Platforms reported earnings of $5.16 per share on revenue of $39.07B, both of which beat consensus forecasts. The company said at that time that it expected third quarter revenue to be in a range of $38.5B-$41B, and full-year 2024 total expenses to be in the range $96B-$99B.

Meta added at the time that, “We anticipate our full-year 2024 capital expenditures will be in the range of $37-40 billion, updated from our prior range of $35-40 billion. While we continue to refine our plans for next year, we currently expect significant capital expenditures growth in 2025 as we invest to support our artificial intelligence research and product development efforts. Absent any changes to our tax landscape, we expect our full-year 2024 tax rate to be in the mid-teens. In addition, we continue to monitor an active regulatory landscape, including the increasing legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and our financial results.”

Current consensus EPS and revenue forecasts for Meta’s third quarter stand at $5.25 and $40.29B, respectively, according to data from Yahoo Finance. The consensus EPS and revenue forecasts for Meta’s full year 2024 stand at $21.38 and $161.92B, respectively.

EXPECTATIONS ARE HIGH: Last week, Jefferies raised the firm’s price target on Meta Platforms to $675 from $600, keeping a Buy rating on the shares as part of a Q3 earnings preview. Expectations are high with Meta shares up 21% since the Q2 report, but channel checks continue to be bullish, giving Jefferies conviction in revenue coming in above the midpoint of the company’s Q3 guidance, the firm tells investors in a research note. T Jefferies also expects Meta to guide Q4 revenue above the Street at the high end. The firm sees pathway to $26-plus in fiscal 2025 earnings, making a $30 2026 earnings per share story “seem possible.” It continues to be encouraged by Meta’s ability to sustain double-digit revenue growth.

MODEST BEAT & BRACKET: Evercore ISI says that based on the firm’s checks of intra-quarter data points and analysis that the firm believes Meta will “likely print a modest Beat & Bracket Q3.” The firm views the Street’s Q3 revenue estimate as “reasonable, with more upside vs. downside variance,” and views the Street’s Q4 revenue estimate as “slightly conservative based on historical seasonality,” the analyst tells investors. Evercore, which also expects Meta to maintain its FY24 total expense and capex guidance this quarter and does not expect Meta to provide FY25 capex and total expense guidance, keeps an Outperform rating and $600 price target on shares ahead of the report due on October 30.

SET-IT-AND-FORGET-IT: Bernstein raised the firm’s price target on Meta Platforms to $675 from $600 on Friday, while keeping an Outperform rating on the shares. Shares are up 59% year-to-date and Meta has replaced Google (GOOGL) as the “set-it-and-forget-it” blue chip holding that offers a growing, healthy core business, an AI winner story with lower terminal risk, and a shareholder-friendly management team, the firm says. The setup through year-end offers a more balanced risk-reward as decent ad buyer checks, higher CPMs, and helpful FX trends are offset by weaker-than-expected ad spending from Temu and Shein, a shorter holiday shopping season, and limited guidance on key 2025 metrics, Bernstein says.

AI DEAL: Reuters (TRI) and Meta Platforms have entered a multi-year deal to allow Meta’s AI chatbot access to news content for responses to current events and news questions, Axios’ Sara Fischer reports, citing sources familiar with the agreement. “We’re always iterating and working to improve our products, and through Meta’s partnership with Reuters, Meta AI can respond to news-related questions with summaries and links to Reuters content,” a Meta spokesperson said.

SENTIMENT: Check out recent Media Buzz Sentiment on Meta as measured by TipRanks.