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Meta Likely To Report Strong Second-Quarter Results Amid Advertising Strength, Deutsche Bank Says

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Meta Likely To Report Strong Second-Quarter Results Amid Advertising Strength, Deutsche Bank Says

Meta Platforms (META) is expected to report strong second-quarter results as improvements in advertising performance continue to drive spending by advertisers, Deutsche Bank said in a note Friday.

The brokerage said Meta's advertising revenue is likely to trend toward the upper end of the company's outlook, supported by stronger returns for advertisers, higher conversion rates and continued benefits from artificial intelligence-powered improvements to ad targeting and campaign automation.

Deutsche Bank expects second-quarter revenue of about $60.5 billion. Analysts polled by FactSet estimate the metric at $60.22 billion. Meta is scheduled to announce its second-quarter results on July 29.

The bank said the third-quarter setup for Meta is "similarly constructive," with buy-side investors expecting the high end of revenue outlook near $64 billion.

"We think that bar is achievable if Meta sustains the recent magnitude of outperformance relative to its initial guidance, supported by improving ad efficiency, continued engagement growth, with growing contributions from business messaging," Deutsche Bank analyst Benjamin Black wrote.

Meta's capital expenditures are expected to remain elevated, but the company is already seeing meaningful benefits from those investments, while subscriptions and infrastructure services could create additional revenue streams over time, Black added.

Deutsche Bank lowered its price target on Meta shares to $800 from $810 and reiterated its buy rating.

Earlier in the week, BofA Securities and Wedbush Securities said Meta's second-quarter results are likely to be supported by solid advertising trends, though both expect the company to raise its full-year capital expenditure guidance.

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