Meta and Rubber the best Internet companies in 2023-Analyst
2023.01.05 13:40
Meta and Rubber the best Internet companies in 2023-Analyst
Budrigannews.com – An analyst at Mizuho Securities stated on Thursday in a note to clients that Meta Platforms Inc. (NASDAQ:) likewise Uber (NYSE:) are the company’s top internet picks for the U.S. in 2023.
Mizuho anticipates that U.S. and Chinese internet stocks will continue to be driven by macro trends throughout the year, with the gap expected to widen.
Additionally, the company anticipates that high inflation and rising interest rates will likely slow GDP growth in the United States.
With a $170 price target for Meta and a $46 price target for Uber, the analysts currently rate both stocks as Buy.
They wrote on Meta that the company anticipates minimal downside risk to the consensus for FY23E, with relatively straightforward revenue comparisons and opex guidance already reflected in the Street’s expectation.
Pricing has benefited as advertising volume has increased. Given the company’s track record of exaggerating expense guidance, there should be potential for profitability gains. They continued, “We believe that Meta’s Reels could benefit from additional government oversight or regulation of TikTok by weakening a significant competitor, which could improve investor sentiment.”
Mizuho analysts believe that unit economics favor ridesharing in the United States for Uber. The analysts explained that this is because of lower costs associated with customer acquisition and driver incentives, which are the two most significant expenses.
“We believe that Uber is the leader in the category and is in a position to gain market share from more rational competitors.” The FY23E EBITDA consensus is supported by Uber’s aggressive reduction of fixed costs and optimization of EBITDA management. “In our SOTP valuation, the stock trades at a discount to peers,” they went on to say.
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