BMO Capital reiterated its Market Perform rating on Meta Platforms Inc. (NASDAQ: META) on Wednesday, maintaining a price target of $580 per share following the company’s $18 billion settlement with state attorneys general over child privacy violations.
The agreement, announced earlier this month, resolves allegations that Meta’s platforms, including Facebook and Instagram, violated the Children’s Online Privacy Protection Act. Payments will be distributed in annual installments over a 10-year period, with Meta covering 70% of the total—approximately $12.7 billion—unless competitors such as TikTok and YouTube agree to similar default usage limits and contribute the remaining $5.3 billion each.
Meta’s shares were trading at $577.38 late on Wednesday, up 1.89% from the previous close of $569.61. BMO’s target implies minimal upside from current levels, aligning with its neutral stance. The firm’s valuation is below other bullish outlooks: Evercore ISI and Bernstein SocGen Group both rate Meta as Outperform, with price targets of $860 and $800, respectively. InvestingPro’s fair-value estimate stands at $599.15, placing Meta on its Most Undervalued list.
The settlement includes structural remedies aimed at limiting minors’ exposure to social media. Default daily usage caps of up to two hours per day—one hour if competitors follow suit—will be enforced, with an option for parents to disable restrictions. Night Mode will block teen access from midnight to 6 a.m. (10 p.m. to 7 a.m. if others comply), while School Mode will mute notifications between 8 a.m. and 3 p.m. Additional measures include enhanced age verification, parental controls, and monitoring tools to prevent minors from creating accounts.
Meta also faces a separate $16.68 billion settlement related to child safety on its platforms, with $11.66 billion in guaranteed payments and up to $5.02 billion in contingent payments. The company’s gross profit margin remains robust at 81.75%.
Meta is set to launch its AI model “Watermelon” in October and the “Hatch” AI agent platform in the coming weeks, though these developments are not directly tied to the settlement terms.
