Evercore ISI reiterated an Outperform rating and an $860 price target for Meta Platforms Inc. following the company's $16.68 billion settlement with U.S. states over allegations of inadequate child protection measures on Facebook and Instagram.
The settlement includes $11.66 billion in guaranteed payments and up to $5.02 billion in contingent payments, representing roughly 1.1% of Meta's $1.49 trillion market capitalization. The agreement stems from claims that Meta's platforms were designed to encourage social-media addiction and failed to adequately protect children, though the company admitted no wrongdoing.
As part of the settlement, Meta agreed to implement default daily time limits and nighttime blocks for teenage users, strengthen age-verification systems, and provide additional parental control tools. The company's broader litigation exposure remains, including outstanding personal-injury and school-district cases unrelated to the state-led settlement.
Meta's shares currently trade at a price-to-earnings ratio of 21.38, near the upper end of their trailing three-year range of 17 times earnings. Revenue growth over the last twelve months reached 27.65%, supported by AI-driven enhancements across its platforms.
Separately, Meta announced security upgrades to WhatsApp, including stronger two-step verification and enhanced caller identification features. The company also plans to launch an AI agent platform named Hatch in the coming weeks and a new AI model, Watermelon, scheduled for October. Bernstein SocGen Group maintained its Outperform rating, citing a 28% year-over-year revenue increase driven by AI investments.
Meta's AI-powered smart glasses face restrictions in UK cinemas due to privacy and piracy concerns, adding to operational challenges in its broader tech portfolio.
