JPMorgan Upgrades Meta Platforms Rating, Company’s Shares Go Up

Meta Platforms recorded a significant push in share prices on the Friday trading session. The pump was recorded mainly due to the contribution made by JPMorgan in bringing investors back to Meta.

On Thursday, the analysts at JPMorgan announced that they had taken an action against the stock status of Meta Platforms.

The stock status for the tech company has been upgraded by analysts at the major investment firm.

According to the analysts, the data privacy pressures and easing costs are why they decided to upgrade the company’s stock status.

JPMorgan Upgraded Meta Platforms Stock Status

Doug Anmuth, the analyst at JPMorgan announced that they had upgraded the stock status of Meta Platforms at their end to “overweight”.

Previously, the stock status for the tech company was set to “neutral” by the analysts at JPMorgan.

Anmuth announced that they have also upgraded the stock price target. He revealed that they have added $35 to the stock price target for Meta Platforms.

Before pumping the stock price, the stock target was set to $80 per share. After the $35 increase, the value of the stock target has been upgraded to $115 per share.

Reasons Cited by Doug Anmuth

The JPMorgan analyst stated that they can see that the cost discipline has been improving for the social media company.

The company has been making its way into augmented reality and is moving towards a breakthrough.

Most importantly, Apple has also increased its pressure over social media platforms, bringing changes to the privacy rules of the ATT.

As a result, the advertisement campaigns have become difficult for the likes of Instagram and Facebook to track easily.

The data for their advertisements has either been restricted or has been delayed by the policy changes introduced by Apple.

Bottom and Top Line Pressures are Expected to Lower

Anmuth stated that they strongly believe that the pressure they are facing in terms of top and bottom line at present will fade away in 2023.

He added that they are witnessing a different kind of strategy being adopted by Meta. The company is now putting in a lot of effort to bring the costs under more discipline.

This is something that Meta had not demonstrated in the past. Therefore, taking such actions is actually going to work out in favor of the company.

The signs of discipline are powerful and they are confident that the strategy will stay put for a longer period.

If the company keeps on practicing the same throughout the year 2023, it will be able to make it through the recession fears without getting impacted.

Major Cost Cutting Step from November

It was in the month of November when Mark Zuckerberg, the CEO and owner of Meta made an announcement about the layoffs.

The CEO announced that they had set off plans in motion that would see 11,000 employees laid off over the course of time.

He mentioned that it was completely his choice to proceed with the action and took full responsibility of that. The 11,000 strength translates to 12.5% of the total workforce at Meta.

This is for the first time Meta has taken the step of laying off so many employees. Although the 11,000 employees will be without jobs but doing so has ensured that the company will make it through.

Prior to the layoff announcement, Mark Zuckerberg had announced that they will continue hiring aggressively until the end of 2022.

As the company started to face major losses in recent quarters, Zuckerberg, decided it wasn’t a good idea to keep hiring. Instead, the company adopted a completely different approach.

The Meta CEO has made it clear that they may not hire until the end of the first quarter of 2023.

Following the announcement, the share prices for Meta surged by 3.5%. At the time of writing, Meta’s shares are trading at $120.21 per share.

Despite the surge, the company’s year-to-date share price still stands at 64% negative.