In the month of January Meta (Facebook) showed its strength on account of the recovery of advertising after the pandemic and set highs above 384 dollars in the last year. Since then, the value has done nothing more than correct its own or unexpected problems. They spend their own due to the effect on their results of Apple’s privacy changes that have weighed down and above all due to the weakness of their expectations for this 2022.
All this, with a kind of delayed reflection in your listing of all the reputational issues that emerged when the “Facebook papers” were made public, which showed a very unpleasant face of the company, with complaints from its own former directors and that have even come, in a clear image-washing attempt, to change its name to the current one, Meta .
Then came the change in monetary policy with an inflation that was no longer transitory and that put the FED in a hawkish model, a challenge in general for Big Tech, which has been affected in its price by the moment of the market.
But while the rest of the companies, with some exceptions such as Netflix, are weathering the storm and are determined to be attractive companies for the future, some with splits included, such as Amazon and Google, Meta chokes more on the present. On the one hand, as has happened in the case of Russia, with the implementation of sanctions that have become a parallel battle between the social network and the Kremlin.
First with Facebook and Instagram blocking the path of Vladimir Putin’s official propaganda media, in an unprecedented measure on account of the sanctions that have supported all the technological ones. And then relaxing hate speech and allowing it against Putin, which has caused Russia to block Instagram after doing so with Facebook in the country for its invasion of Ukraine.
And it is not just about a position, but these actions cost Meta a lot of money: according to Morgan Stanley Russia represents 1.5% of its advertising revenue. Your sales last year in the country lot exceeded 1,700 million, of the 114,900 that the company obtained worldwide. A daily loss of 4.3 million dollars.
This strengthens its cuts in the market despite the positive partial advance of 1.25% in the last trading week. The value fell 12.8% in the month, with quarterly falls of 43.2% yeSo far this year the cut reaches 43.5%.
On the other, his regulatory problems are growing in the European Union and that at the beginning of February they made him insinuate, to later rectify, that Instagram could be closed in the community and that they are now greening, also in the United Kingdom. In this case too Investigate Google for Jedi Blue, the 2018 deal between the two companies that prevents small businesses from accessing the advertising market. A formal investigation is opened in the EU and the British are going to review the agreement.
As for recommendations on the value, dFrom TipRanks of the 45 analysts who follow the stock, 31 choose to buy, 13 to keep the shares in the portfolio and one to sell, with a target price that, however, continues to leave a wide margin of travel for the value, given the strong range of the best recommendation, 466 dollars of PO and the worst in the 220 dollars The average was $326.56, with a potential advance of over 72%.
while of Deutsche Bank have started coverage the past fours about his actions with a buy recommendation and target price for the value of 265 dollars per share. Who has lowered his PO is Piper Sandler has lost $240 per share from the previous $301 rated overweight on its shares. Its analyst Thomas Champion considers that its ratios continue to drop and will continue to do so until at least August.
But he also considered that the slowdown in the growth of its active users, the reopening of the global economy and more and more users switching to Instagram Reelsque They monetize at a lower rate than other company products.
If you know the value of most of the Stock Market assets, register for free at Investment Strategies.