Meta Platforms rises as TD Cowen upgrades on positive Q2 checks
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Meta Platforms (NASDAQ:META) shares rose more than 1% in pre-market trading on Thursday as TD Cowen upgraded the tech giant citing the potential for further market share gains and positive checks for the second-quarter. 
Analyst John Blackledge raised his rating on Meta (META) shares to outperform from market perform and boosted his per-share price target to $345 from $220, noting that he believes consensus estimates are "too low," citing the potential for monetization upside from Reels, positive Reels engagement, the potential to monetize the newly launched Threads and possibly more cost cuts.
"TD Cowen Proprietary 2Q23 Social Survey Data through June '23 shows modest [year-over-year] engagement improvement at Instagram and Core Facebook," Blackledge wrote in an investor note. "Respondents once again indicated rising usage of IG Reels, suggesting that Reels could be a driver of incremental time spent on Instagram." 
Blackledge added that his second-quarter digital ad check was "positive" for Meta (META) and suggested further monetization of Reels via image-based overlay ads that launched on Instagram at the end of June.
The analyst said he sees second-quarter revenue and earnings coming in above Wall Street estimates, along with full-year figures as well. He also boosted his revenue and earnings estimates by 8% and 7% on average over the next 5 years. 
The analyst also said that there is the potential for more cost cuts, given that the company is likely to face roughly $14B in losses associated with the metaverse this year. 
Lastly, Blackledge thinks Meta (META) will eventually monetize Threads, which surpassed 100M users in the first five days. 
"We do not have any potential Threads rev. in our current Meta forecast, but if the service attracts further users and engagement, we expect Meta to start to monetize the app," Blackledge wrote, pointing out that the company may bring Instagram's branded content tools to Threads. 
Analysts are universally bullish on Meta (META). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates META a STRONG BUY.
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