Meta stock price target cut more than 20% at Mizuho as ad spending is weaker than usual

Facebook parent Meta Platforms Inc. suffered a stock price target cut of 23% at Mizuho, because checks with leading ad agencies indicated that the second-quarter seasonal lift in spending is about one-third of normal levels. Analyst James Lee lowered his price target to $250 from $325, but kept this rating at buy as the new target still implied a 48% rally off Friday's closing price of $169.27. Lee said a shift in revenue mix to Instagram Reels was also acting as a headwind, as was challenges in iOS privacy. "In addition, the continued mix shift to offline and service industries is less favorable for META advertising," Lee wrote in a note to clients. "Finally, the progress in IG Reels could also negatively impact monetization near-term." Lee now expects second-quarter revenue to fall 2% from a year ago, while the FactSet consensus of $28.92 billion implies a 0.5% decline. Meta is scheduled to report second-quarter results on Wednesday, after the closing bell. The stock, which edged up 0.4% in premarket trading, has tumbled 49.7% year to date, while the SPDR Communication Services Select Sector ETF has dropped 27.9% and the S&P 500 has lost 16.9%.

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