Meta Analyst Sees Monetization Ramping Courtesy Reels, Newer Ad Formats

Citi analyst Ronald Josey reiterated a Buy on Meta Platforms Inc META and a price target of $222.
Based on his proprietary tracking of ads on IG Reels, he believes monetization is ramping as his data suggests ad loads reached 14% in September compared to 8% in July. An initial ad exposure is now earlier in the experience.
He recognizes it remains early days in Reels monetization and the challenges in engagement given the competition in Short-Form-Video.
Still, he also believes Reels could have naturally higher and largely incremental ad loads over time, and integration of Reels content within Feed, Stories and Messenger complements Meta’s evolving MSI.
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He was encouraged by Meta’s newer ad formats announced earlier this week that he believes represent the beginnings of its rebuilt AI-based ad tech stack.
While macro challenges persist, he believes improved Reels monetization, newer ad formats, and a greater focus on expenses create a compelling risk-reward in shares.
Price Action: META shares traded lower by 3.65% at $134.00 on the last check Friday.

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