Meta could see $20 in earnings per share by 2024, Morgan Stanley says
Justin Sullivan
Meta Platforms (NASDAQ:META) could generate as much as $20 per share in earnings by 2024, investment firm Morgan Stanley said, aided by Reels, Click to Message and the company's "core" ads business. 
Analyst Brian Nowak, who has an overweight rating and a $375 price target on Meta (META) shares, said that better Reels monetization has been a surprise, especially given it's still only monetizing at roughly 28% of the core ad business. 
"METAâs periodic Reels revenue disclosure ... helps us estimate that Reels global [average revenue per user is still only roughly 28%] the rate of other average META engagement," Nowak wrote in an investor note, adding that that's up from roughly 7% in the second-quarter of 2022.
Additionally, since Reels engagement is driving more time spent on the platform, Nowak believes it's likely that Reels could boost the company's ad revenue and reach roughly 44% of relative monetization by 2024, which would imply a 108% growth rate and roughly $13B in ad revenue to clock in at $25B. 
Nowak also estimates that the company's click to message business accounts for roughly $12B of total ad revenue, but it's growing at a healthy clip, at roughly 36% year-over-year.
"We expect [click to message] to continue to grow at outsized rates, with META investing in onsite objectives like lead-gen and products to enable businesses to optimize for down funnel conversions in messaging apps," Nowak added, explaining that AI-powered agents could also boost WhatsApp, Messenger and Instagram. 
Excluding Reels and click to message, Nowak noted that the rest of Meta's (META) ad business has been "choppy" in recent years due in part to Apple's (AAPL) app tracking transparency initiatives, engagement trends and a host of other issues. However, it looks as if the company is still innovating on both the ad and engagement trend fronts, which could drive "more durable" core revenue growth in the future. Nowak estimated that for every 1% year-over-year increase, it could add roughly 1% to the company's earnings per share.

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