By Peet Serfontein & Zimele Mbanjwa
Meta (formerly Facebook) is the world's largest social-networking app provider with a universe of major platforms: Facebook, Instagram, Messenger, Threads, and WhatsApp, which allows people from all over the world to connect and share text and digital media with each other.
The company boasts over 3 billion monthly users and serves more than 12 million advertisers across its family of apps. In addition, the company operates technology and services in the field of virtual/augmented reality.
Meta generates most of its revenue from selling advertising placements on its platforms.
From a technical point of view, the stock presents a speculative buying opportunity. The price is in an accumulation phase. Prices tend to move within a narrow range during this phase, reflecting a balance between supply and demand. This consolidation period is crucial as it sets the stage for future upward movement. High trading volumes may indicate that institutional investors are entering the market, gradually accumulating large positions.
The stock is trading above its 200-day simple moving average of ~$390.10.
Muted downside momentum, according to the MACD indicator, as well as sharp upwards movement of the on-balance volume indicator, supports our bullish view.
This stock can also be accessed by JSE traders via the FNB ETNs (FAETNC; FAETNQ).
Share Information
| Share Code | META US |
|---|---|
| Industry | Media & Entertainment |
| Market Capital (USD) | 1203.37 billion |
| One Year Total Return | 80.89% |
| Return Year-to-Date | 34.16% |
| Current Price (USD) | 474.36 |
| 52 Week High (USD) | 531.49 |
| 52 Week Low (USD) | 258.45 |
| Financial Year End | December |
| The stock price has performed well over a one-year period, as well as year to date. Current technical indicators support more upside momentum. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 14.87 | 21.03 | 24.13 | 27.18 |
| Growth (%) | 41.40 | 14.77 | 12.64 | |
| Dividend Per Share (USD) | 0.00 | 1.90 | 2.06 | 2.28 |
| Growth (%) | - | 8.32 | 10.93 | |
| Forward PE (times) | 22.56 | 19.66 | 17.45 | |
| Forward Dividend Yield (%) | 0.40 | 0.43 | 0.48 | |
| Earnings growth is expected to be robust this year, with some moderation in the medium term. | ||||
Rationale:
Technical Analysis:
Long-term fundamental view:
| Share Name and position | ABBV - Stop Loss (Close the position) | PNW US - Buy (Continue to hold) | MO - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 164.35 | 73.02 | 43.54 |
| Current | 157.06 | 75.73 | 45.15 |
| Movement | -4.4% | 3.7% | 3.7% |
| Stock price technicals have deteriorated severely, leading to a breach of our stop-loss limit. |
A developing symmetrical triangle remains of interest. The stock is testing its 200-day moving average. Upside price momentum has halted, which is a concern.
Our profit target is $81, with a trailing stop-loss of $72.60. Exit the trade by 5 July 2024. |
The formation of a falling wedge pattern is attractive. The stock remains above its 200-day moving average. Upside price momentum has halted, which is a concern.
Our profit target is $48, with a trailing stop-loss of $43.50. Exit the position around 19 July 2024. |
| Share Name and position | FRAS - Buy (Continue to hold) | AUTO - Buy (Continue to hold) | PEP - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 799.5 | 724.50 | 171.44 |
| Current | 825 | 730.60 | 171.15 |
| Movement | 3.2% | 0.8% | -0.2% |
|
The development of a symmetrical triangle pattern in an uptrend remains of interest. The stock is testing its 200-day moving average. Upside momentum, though muted, is supportive.
Our profit target is $897, with a trailing stop-loss of $786. Exit the trade by 21 June 2024. |
The formation of an inclining channel pattern remains of interest. The stock is trading above its 200-day moving, which is encouraging. Muted downside momentum is supportive.
Our profit target is £800, with a trailing stop-loss of £699. Exit the trade by 5 July 2024. |
A price above key support remains of interest. The price remains above its 200-day moving, which is encouraging. Upside price momentum remains halted, which is a concern.
Our profit target is $190, with a trailing stop-loss of $165. Exit the trade by 26 June 2024. |
