Meta Platforms’ Buy Rating: The Impact of Recent Amazon Partnership and Growth Potential in Social Commerce

In a report released on November 10, Justin Post from Bank of America Securities maintained a Buy rating on Meta Platforms (METAResearch Report), with a price target of $384.00.

Justin Post’s Buy rating for Meta Platforms is primarily influenced by two principal factors. The first one being the recent partnership between Meta and Amazon, which allows users on Facebook and Instagram platforms to shop directly from the promoted Amazon ads, without having to leave the app. This collaboration not only enhances user experience but also increases product awareness for Amazon, given Meta’s robust targeting capabilities. This could potentially lead to improved ad conversion due to reduced friction before purchase.

The second reason behind the Buy rating revolves around the significant growth potential for Meta’s on-platform shopping capabilities due to this collaboration. It is anticipated that this partnership will accelerate Meta’s entry into the vast social commerce total addressable market (TAM), which is projected to grow at a compound annual growth rate (CAGR) of 21% to $145 billion by 2027. Furthermore, this partnership could aid in increasing lower funnel conversions, capturing more first-party data, enhancing user engagement, and speeding up monetization for Meta’s messaging assets. While the immediate impact of this partnership on Meta’s revenue is expected to be limited, it is seen as a positive step towards addressing concerns about high Chinese advertising spend in 2024.

In another report released on November 1, Loop Capital Markets also maintained a Buy rating on the stock with a $375.00 price target.

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Based on the recent corporate insider activity of 127 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of META in relation to earlier this year.

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Meta Platforms (META) Company Description:

Social networking company Facebook, Inc. develops applications that enable people to connect through mobile devices, personal computers, and other devices. The firm’s products include Facebook, Instagram, Messenger, WhatsApp, and Oculus. Its revenue comes primarily from advertising. The company was founded by Mark Zuckerberg, Dustin Moskovitz, Chris R. Hughes, Andrew McCollum, and Eduardo P. Saverin on February 4, 2004 and is headquartered in Menlo Park+D9, CA.

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