To The Moon

Meta shares climbed 1.3% after upgraded at Morgan Stanley.

Meta’s tightening its belt and has business improvements that may not be fully appreciated, Morgan Stanley said.

Analyst Brian Nowak upgraded the stock to overweight from equal weight. Nowak also raised his price target by $60 to $250, implying an upside of 26.4% from Monday’s close.

“We are taking a more conservative approach with forward ad growth and if the consumer does weaken, we think META is better positioned than GOOGL (which hasn’t reduced costs as aggressively) and AMZN (where retail profitability improvement is partially predicated on growing consumer spend and macro uncertainty could push out the AWS growth improvements),” Nowak said in a note to clients Tuesday.

Nowak said the Facebook parent’s plans to increase efficiency should help by prompting “a structural and cultural pivot to operate leaner and with a greater focus on investor returns.” CEO Mark Zuckerberg has deemed 2023 the “year of efficiency,” with plans that include a round of 10,000 layoffs and a refining of the distributed work model. Nowak said he’s hopeful the plan signals to other technology companies to get more disciplined on spending.