Meta Platforms 'Stuck in the Real World' Says HSBC

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Meta Platforms 'Stuck in the Real World' Says HSBC
Credit: © Reuters.

By Sam Boughedda -- Meta Platforms Inc's (NASDAQ: FB ) price target was cut to $200 from $225 by HSBC analyst Nicolas Cote-Colisson on Thursday.

The analyst, who has a Hold rating on the stock, wrote in a note to clients that the company is "stuck in the real world." Meta is facing short-term challenges such as proving it can effectively compete against fast-growing platforms such as TikTok, the consequences of the Russian invasion of Ukraine, and disposable household incomes being squeezed globally, which may represent a headwind for consumption and advertising volumes, he said.

Cote-Colisson added that the company also still faces multiple regulatory challenges, while it is building an expensive future in the metaverse space with a very ambitious plan to build the next computing platform and its Reality Labs division making large investments. 

"Given the experience and the tech stack the company has built since the acquisition of Oculus in 2014, we agree with CEO comments that Meta can 'meaningfully be better at monetization than others in the space'. But for now, costs are a certainty, and the platform has not yet proven its attraction and may not prove to be successful in the next few years," the analyst wrote.

Meta stock is down 1.3% Thursday.

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