- RBC Capital analyst Brad Erickson reiterated Outperform on Meta Platforms Inc (NASDAQ:FB), but lowered the price target from $245 to $240 (11.3% upside).
- Another round of SMB ad agency channel checks raised the conviction that FB will likely see another rocky quarter, prompting lower estimates and PT to $240.
- The beneficiaries from FB erosion appear largely unchanged: Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), Tiktok, Influencers, and Microsoft Corp (NASDAQ:MSFT) LinkedIn.
- Digital ad spending decisions remain in flux, with many SMBs considering new channels away from FB for the first time.
- Erickson detected no perceived improvement to FB's targeting algo or performance.
- Erickson saw some reversion at some point given FB's audience size and relative scaled conversion advantage (which kept it at Outperform) but saw that narrative as unlikely to materialize near-term.
- Price Action: FB shares traded higher by 0.91% at $216.06 on the last check Wednesday.
