Meta’s Rally Doesn’t Need a Hand From TikTok Ban

tech.hindustantimes.com:

A good year for Meta Platforms Inc. investors has the potential to get better still — even without the boost that a ban on Chinese rival TikTok would undoubtedly bring.

The Facebook-owner's stock has surged 54% this year, the fifth-best performer among components of the Nasdaq 100 Index, as the company pledges to be a more efficient business. Those gains look likely to extend on Tuesday after Bloomberg reported that Meta plans to cut thousands more jobs.

The shift in strategy puts the firm more in tune with a market where investors are favoring cost controls and earnings over growth. And with the stock still cheap relative to its own history, analysts are turning increasingly bullish. Such optimism would only increase should US lawmakers succeed in a push to outlaw Chinese technology, including services like TikTok.

With its popularity among younger users, TikTok “has been taking an increasing pie of the digital ad dollars from other social media players,” said Angelo Zino, senior equity analyst at CFRA Research. Should the service be banned in the US, the biggest beneficiaries would be Meta, Snap Inc., and Alphabet Inc.'s YouTube business, he said.

Whatever the outcome, analysts are upbeat on the outlook for Meta stock, which they see rising a further 16% over the next 12 months, based on the average of price targets compiled by Bloomberg. That's greater than the 11% implied upside for Pinterest Inc. and an 8.9% decline expected for Snap.

In a sign of how sentiment has improved, the consensus recommendation for Meta — a measure of buy, hold, and sell ratings among analysts — has risen to 4.3 out of five, the highest since October and up from a recent low of 4.

The growing optimism is backed by a valuation that