Citi analyst Ronald Josey reiterated a Buy rating on top pick Meta Platforms, Inc (NASDAQ: META) with a price target of $425.
META announced advertising-free subscription tiers for users in the EU, EEA, and Switzerland, effective in November.
By offering an advertising-free subscription service, the analyst notes that Meta can satisfy the EU's GDPR 'consent' basis for collecting data in what could likely be a revenue-neutral manner, given Meta plans to continue offering its core ad-supported service to most EU users (18+).
Josey notes that Meta confirmed that its guidance reflects the new subscription model.
The subscription tiers are priced at €9.99/month on the web or €12.99/month on mobile (iOS and Android) and provide users with an ad-free experience across linked Facebook and Instagram accounts.
While broader regulation risk remains, with continued engagement growth, ramping product development cycle, investments in newer monetization tools, and the analyst's view that the 'year of efficiency' continues into 2024.
Price Action: META shares traded lower by 0.88% at $300.01 on the last check Tuesday.