Meta Platforms, Inc. (NASDAQ: META) has finally launched its Twitter clone, Threads, to mixed reviews. However, this has not stopped an optimistic analyst from becoming even more bullish on the Mark Zuckerberg-led company's stock.
The Meta Analyst: KeyBanc Capital Markets analyst Justin Patterson, maintaining an Overweight rating, raised the price target from $280 to $335, suggesting a potential 14% upside from current levels.
The Meta Thesis: Patterson believes that the Threads launch in 100 countries on Android and iOS addresses potential barriers to adoption. He notes that Meta has incorporated features that mirror Twitter, similar to how it borrowed Stories from Snapchat and Reels from TikTok.
According to Patterson, if Meta can capture at least one-third of Twitter's U.S. audience or reach 50% of Facebook's U.S.-Canada audience, it could increase KeyBanc's 2024 revenue estimate by $800 million to $6.7 billion. He also expects international monetization to be comparable to the U.S.
Great Expectations: In the short term, Threads will have minimal impact as Meta focuses on adoption rather than monetization, the analyst said. However, Patterson highlighted that the core ad platform remains robust, leading to an upward revision of the 2023 and 2024 earnings per share forecasts by 4%-10% to $12.81 and $16.77, respectively.
He attributed this optimism to strong top-line performance, operational efficiencies, and ongoing share buybacks.
Price Action: On Wednesday, Meta's shares closed at $294.37, reflecting a 2.92% increase, according to Benzinga Pro data.