Here's How KeyBanc Views Meta, Snap

KeyBanc analyst Justin Patterson lowered the price target on Meta Platforms Inc FB to $280 from $420 (16% upside) and kept an Overweight rating on the shares following quarterly results.
The analyst notes measurement headwinds are clearly more significant than envisioned, and estimates reset materially.
The positive is that Meta has historically managed these transitions before and come out stronger, Patterson notes.
Given a stricter privacy environment and industry-wide measurement challenges, the analyst eventually believes Meta's investments in AI and Capex will yield long-term advantages over competitors, which should get the business back to a 20%-plus year-over-year growth profile in 2023.
Patterson lowered the price target on Snap Inc SNAP to $36 from $85 (44% upside) and kept an Overweight rating on the shares following Meta's and Alphabet Inc's GOOG GOOGL earnings reports.
The analyst sees ongoing ad measurement headwinds driving shifts out of social, vertical headwinds, and margin pressure from investment. Taken together, multiples should compress, Patterson notes.
While he is cautious the degree of margin risk could be a new sentiment overhang, he acknowledges valuation multiples have swung considerably, leaving room for results to be "less bad" than feared.
Price Action: FB shares traded lower by 25.44% at $240.83, and SNAP is down 21.89% at $25.05 on the last check Thursday.