RBC Capital Slashes Price Targets Of Meta, Alphabet, Pinterest, Amazon - Read Why

  • RBC Capital analyst Brad Erickson dove in deep with SMB-focused advertising agencies for near-term spending feedback and the ever-evolving competitive landscape across different ad channels. 
  • Bottom line, he found clear signs of cracks forming on overall spending though interestingly, SMB weakness seems very much yet to entirely run its course, indicating potentially a more persistent risk to 2H estimates. 
  • Competitively, TikTok spends are likely to get cut before Alphabet Inc GOOG GOOGL or even Meta Platforms Inc META near-term due to it being less mission-critical for revenue generation. 
  • However, he detected noticeable TikTok ad platform & scalability improvements which is an incremental negative for META longer-term vs. his prior checks. 
  • He reduced estimates and price targets on META, GOOGL, Pinterest, Inc PINSAmazon.com Inc AMZN.
  • He cut the price target of META to $200 from $240; GOOGL to $2,700 from $3,420; AMZN to $144 from $175; PINS to $23 from $26
  • He had lowered the same for Snap Inc SNAP in May post negative preannouncement
  • He found arguments for multiple expansion from the current attractive levels on GOOGL & META as somewhat weak, leaving less room for upside in the stocks pending signs of budget stability and better visibility around reacceleration. 
  • Price Action: META shares traded lower by 0.21% at $169.77 on the last check Monday.

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