10 Billion Reasons Meta’s Q3 EPS Could Shock You, and Not How You Think

Meta Platforms (META) reports third-quarter results on Oct. 21, and the earnings number could look ugly. Meta expects to book a $10 billion legal charge this quarter, stemming from an August settlement with dozens of state attorneys general over claims that its apps harmed young users.

Bank of America analyst Justin Post cut his Q3 EPS estimate from $7.08 to $3.79 because of it. That’s well below the consensus of around $6. Still, Post thinks the core business is doing better than expected. He sees artificial intelligence (AI)-driven ad growth lifting revenue to $63.8 billion, above the $63.3 billion consensus. He kept his “Buy” rating and $810 price target, which implies about 15% upside as of this writing.