Meta Platforms sinks as BofA downgrades on worries over increased ad spend pressure

Meta Platforms ($Meta Platforms, Inc.(META)$ fell on Monday as Bank of America downgraded the tech giant on worries over increased pressure on advertising spending.

Analyst Justin Post moved his rating on Meta (META) to neutral from buy noting that checks into the stability of ad revenue indicated an in-line quarter.

However, concerns over budget cuts next year and the weakness seen in Snap's (SNAP) revenues may weigh on sentiment.

"While [fourth quarter] & 2023 expectations have been lowered, we expect advertiser budget cuts in early 2023 to weigh on sentiment and drive added uncertainty on post-IDFA changes and Reels transition," Post wrote in a note to clients. The analyst also lowered his price target on Meta (META) to $150 from $190.

The analyst added that 2023 revenue growth is expected to be just 4% year-over-year to $120B, well below the $127B that Wall Street is expecting, with the potential for "downside risk to our estimates in a recession."