Meta Platforms, Inc. META shares surged in premarket trading on Friday following its stellar quarterly results, with the board’s approval for a dividend initiation adding momentum to the rally.
In its Thursday after-hours report, Meta revealed fourth-quarter earnings and revenue that exceeded expectations, surpassing Wall Street forecasts for key user metrics such as daily active users and average revenue per user.
The company’s optimistic first-quarter revenue guidance indicates sustained momentum in the current quarter. Meta’s board approved a quarterly dividend of 50 cents per share, payable on March 26 to shareholders recorded as of Feb. 22.
Additionally, the company announced a new repurchase authorization of $50 billion in shares, supplementing the $30.93 billion pending from a previous authorization.
Analyst Reacts: Following the impressive results, KeyBanc Capital Markets analyst Justin Patterson reiterated an Overweight rating and increased the price target from $465 to a Street-high $575. This price-target adjustment builds on the 22% hike announced just before the results.
“Meta’s 4Q23 report allayed concerns around a 2024 deceleration,” Patterson said in the note. He now looks for a three-point acceleration in growth to 19%. The analyst also lauded the company’s sound capital allocation, referring to the dividend initiation and the incremental buyback authorization.
The analyst noted, “Importantly, Meta’s investments in capex are also being met with clear returns, as evidenced by atypically strong 1Q guidance.”
Consequently, he raised his 2024 and 2025 earnings per share estimates by 10% and 7%, respectively. With the projected earnings per share poised to grow at a two-year compounded annual growth rate of 27%, the analyst justified the price target increase, citing the warrant for multiple expansions.
In premarket trading, the stock was up 16.81% at $461.16, according to Benzinga Pro data.
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