Meta Platforms (NASDAQ:FB) got a lift on Tuesday even as Piper Sandler analyst Thomas Champion cut his price target on the Mark Zuckerberg-led company's stock, noting that its advertising issues are likely to continue for the next several months.
Champion lowered his price target to $240 a share from $301, but reiterated his overweight rating on Meta's (FB) stock. Champion said Meta's "dismal" first-quarter guidance was a result of a number of issues, including difficult pricing comparisons and increased spending as the company transitions to being a metaverse-first business.
"The data suggests challenging post [App Tracking Transparency] compares continue till August," Champion wrote in a note to clients, adding that March and April already look "particularly onerous."
Meta's (FB) shares rose early and remained up by more than 4% as trading progressed, Tuesday.
Champion also pointed out that negatives to impressions include slowing daily active user growth, the re-opening of the global economy and more users shifting to Reels, which currently monetize at a lower rate than the company's other products.
Earlier this month, Morgan Stanley also cut its price target on Meta Platforms (FB), citing headwinds for monetization on Reels.