Bank of America Downgrades Meta To Neutral From Buy With Metaverse Concerns
According to CNBC, Bank of America downgraded Facebook parent Meta (META) to neutral from buy due to the possibility that advertising expenditure pressures will intensify next year, resulting in budget cuts.
Bank of America reduced its price estimate for the stock from $196 to $150. Meta shares plummeted roughly 4% before rebounding to trade slightly lower and closed at $129.72 on Monday.
Bank of America also stated that Meta’s massive investment in the metaverse is likely to remain an overhang on the stock, noting that analysts are unlikely to deduct metaverse spending from EPS for valuation purposes given the lack of progress with users, potential new competition from Apple, and a higher cost of capital mindset.
The European Digital Markets Act and many assessments of Section 230 liability protection are projected to remain hard-to-quantify sentiment overhangs on the company, which may hinder value-focused purchasers, according to the research.
According to the note, Meta should address investor concerns about Instagram usage headwinds, spending on building the metaverse given the perceived lack of user traction, high capital expenditures affecting free cash flow (FCF), Reels content quality and margins, and progress, and a timeline for targeting improvements. Meta will release its third-quarter earnings after the market closes on Wednesday, October 26.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Harold
CoinCu News
Author
Metaverse News
Bank of America Downgrades Meta To Neutral From Buy With Metaverse Concerns
According to CNBC, Bank of America downgraded Facebook parent Meta (META) to neutral from buy due to the possibility that advertising expenditure pressures will intensify next year, resulting in budget cuts.
Bank of America reduced its price estimate for the stock from $196 to $150. Meta shares plummeted roughly 4% before rebounding to trade slightly lower and closed at $129.72 on Monday.
Bank of America also stated that Meta’s massive investment in the metaverse is likely to remain an overhang on the stock, noting that analysts are unlikely to deduct metaverse spending from EPS for valuation purposes given the lack of progress with users, potential new competition from Apple, and a higher cost of capital mindset.
The European Digital Markets Act and many assessments of Section 230 liability protection are projected to remain hard-to-quantify sentiment overhangs on the company, which may hinder value-focused purchasers, according to the research.
According to the note, Meta should address investor concerns about Instagram usage headwinds, spending on building the metaverse given the perceived lack of user traction, high capital expenditures affecting free cash flow (FCF), Reels content quality and margins, and progress, and a timeline for targeting improvements. Meta will release its third-quarter earnings after the market closes on Wednesday, October 26.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Harold
CoinCu News
Other Posts
Latest
Swift, UBS, Chainlink Complete Pilot for Global Tokenized Fund Settlement Network
Jambo and Lif3 Partner to Make Crypto Payments Accessible to Millions of Users in Emerging Markets
Press Release
Jambo and Lif3 Partner to Make Crypto Payments Accessible to Millions of Users in Emerging Markets
Which 3 Altcoins Will Skyrocket the Most in the Next Big Bitcoin Rally?
