UBS Cuts Meta Platforms, Inc. TP to USD715; Business Agents Seen as Potential Revenue Catalyst
Complete. Here is the key summaryUBS lowered Meta Platforms' target price to USD715 from USD765, maintaining a Buy rating. The cut reflects raised 2026 capex and expense guidance, leading to reduced EPS forecasts for 2026-2028. However, UBS highlights Business Agents as a potential revenue catalyst, noting rapid adoption by 1 million accounts. While Q2 revenue beat expectations, management's Q3 guidance was slightly below consensus. UBS anticipates significant monetization growth from AI-driven ad tools and new products in 2027-2028.
UBS published a report stating that after Meta Platforms, Inc. (META.US) announced its 2Q results recently, the market has yet to fully price in the monetization potential of its Business Agents. The broker reiterated its Buy rating and lowered its TP from USD766 to USD715.
The report noted that within one month of launch, Meta Platforms, Inc. (META.US) 's Business Agents had already been adopted by 1 million commercial accounts. Management indicated that charging through subscription and usage-based pricing models would begin in 2H26. UBS believes Meta typically takes around two years to materially scale revenue from new products, but considering its existing base of about 400 million commercial accounts, the monetization timeline could be shortened. This implies revenue may see step-change growth in 2027 or, at the latest, 2028, a factor that market expectations have yet to reflect.
Meta's 2Q revenue reached USD60.8 billion, above market expectations of USD60.2 billion, while advertising revenue totaled USD59.4 billion, also beating forecasts. During the period, ad impressions rose 18% YoY, slightly slowing from 19% in 1Q26. Management guided 3Q revenue at between USD61 billion and USD64 billion, with a midpoint of USD62.5 billion, slightly below market expectations of USD63.1 billion. UBS expects Meta to gain incremental budget allocations from large advertisers and SMEs through AI-driven ad optimization, Advantage+ creative tools and automated delivery functions.
On costs, management raised 2026 capital expenditure guidance to between USD130 billion and USD145 billion, from the previous USD125 billion to USD145 billion. Full-year total expense guidance was also lifted to between USD165 billion and USD169 billion, from the prior USD162 billion to USD169 billion. UBS accordingly lowered its 2026, 2027 and 2028 GAAP EPS forecasts to USD32.48, USD28.78 and USD29.47, respectively, from previous estimates of USD33.93, USD30.2 and USD32.12.
UBS's TP of USD715 is based on an unchanged projected price-to-earnings ratio of 25x, calculated using full-year GAAP EPS of USD28.59 through 2Q28. The broker believes a 25x P/E ratio is prudent until the market sees concrete evidence of new revenue streams or a reduction in spending plans. (da/j)(Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)