Meta Platforms (META) is entering 2026 with three catalysts that could drive re-rating and potential outperformance, with a bull-case valuation reaching $1,000 per share, Morgan Stanley said in a Thursday note.
The catalysts include anticipated revenue revisions, the company's 2026 operating expense guide, and new products from Meta's Superintelligence team.
Investor sentiment toward Meta has weakened due to concerns about revenue durability, rising costs and setbacks related to its Llama development, the brokerage said.
The investment firm cut its 2026 and 2027 earnings per share forecasts by roughly 8% despite the bullish outlook, however, the analysts still expect Meta to reach about $33 in EPS in 2027.
Morgan Stanley expects Meta's 2026 to 2027 revenue to come in between 2% and 4% above consensus and said that upbeat Q4 guidance could reinforce confidence in the company's long runway for engagement, monetization, and platform improvements.
The firm raised its GAAP opex outlook to $155 billion for 2026 and $187 billion for 2027, following updated assumptions for infrastructure, hyperscaler spend and other related costs.
The market is undervaluing Meta's upcoming LLM developments, highlighting a frontier model anticipated in spring 2026, according to the note.
Morgan Stanley maintained an overweight rating on the stock but lowered its price target to $750 from $820.
Shares of Meta were down 0.3% in recent trading.
Price: 648.13, Change: -2.00, Percent Change: -0.31
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