RBC Capital provided its review on Meta Platforms, Inc. (NASDAQ:META), highlighting that investors are increasingly baking in concern around META’s user mix shift to Reels.
The analysts evaluated ad load & pricing across Instagram surfaces (& Tiktok) as a way to quantify META’s potential variance to 2023 consensus estimates and view the downside from here as being more limited.
While Reels’ apparent building headwinds are absolutely concerning, the analysts remained positive on the company leaving the door open for near/medium-term ad targeting signal restoration as this would far outweigh the Reels headwinds.
According to the analysts, users’ shift to short-form video & Reels specifically is of rising concern and increasingly baked into the shares. The analysts believe the risk/reward remains attractive and maintained their outperform rating and $190 price target.