BofA Securities analyst Justin Post maintained a Buy rating on Meta Platforms Inc (NASDAQ:META) with a price target of $710.

Post recently lowered his fourth-quarter estimates for recent US dollar appreciation and are now in line with Street for fourth-quarter revenue (Post’s estimate of $47 billion) but above for EPS (Post’s estimates of $7.05 versus Street’s $6.75).

Post’s checks suggest Meta could benefit from eCommerce sales and strength in shopping ads, improving AI models for ad targeting, and new CRM integration, which would drive higher ROI and ad spending.

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Post remained below the Street on expenses. He also estimates fourth-quarter daily active people (DAP) at 3.32 billion versus 3.33 billion on the Street.

DeepSeek traction and performance will likely be a key call topic given Meta’s open-source focus and outsized capex growth in 2025.

With a five-point tougher year-on-year ex-foreign exchange revenue growth comp in the first quarter, Post expects a deceleration in the revenue guide, which will also include FX pressure.

The analyst expects a first-quarter revenue guide of $38 billion and $42 billion (up 4-15% Y/Y) versus Street’s $41.8 billion. Investors Post spoke to expect additional FX pressure in the first-quarter revenue guide, and comps ease as the year progresses, so Street may be looking for any commentary suggesting stabling growth post first-quarter. For expenses and Capex, Meta announced plans to invest $60 billion-$65 billion in capex for 2025, focusing on enhancing AI infrastructure.

Post noted the outlook was in line to slightly above expectations but has cleared some call uncertainty. With 2025 capex expected to be up $20 billion+ Y/Y, Post expects Meta to spend time on AI products and capex ROI on the call.

Given recent news of 5% layoffs, ramping depreciation due to capex, and some FX savings, Post expects fiscal 2025 expense guidance at $108 billion-$113 billion (which compares to Street at $111 billion).

Meta’s AI-driven ad enhancements are expected to unfold over several quarters. For 2025, key growth drivers include:

• Expanding AI/ML capabilities to boost ad performance and spending
• Increasing short-form video usage and monetization
• Growing messaging revenues, and
• Monetizing platforms like Threads, Meta AI, and Marketplace.

Additionally, Meta’s advancing AI capabilities may lead to unexpected product innovations.

At $647.49, Meta is trading at 22 times fiscal 2026E GAAP EPS. The stock is trading at 18 times fiscal 2026E EPS, which Post noted as attractive versus S&P at 20 times.

Post-projected fourth-quarter 2024 revenue and EBITDA of $47 billion and $29.5 billion are in line and above Street at $47 billion and $28.4 billion. The analyst expects fourth-quarter EPS of $7.05, above Street at $6.76.

Price Action: META stock is up 1.58% at $657.74 at the last check on Monday.

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