Meta Platforms Inc (META: NSD) is now facing a new legal problem: federal authorities in the US are looking into whether it has any ties to the illegal drug trade, according to a report in the Wall Street Journal.
Federal prosecutors are focused on drug-related content on Meta’s social media sites, such as Facebook and Instagram. For their investigation into the chance of illegal drug sales going through these channels, they are looking for records.
Stock Target Advisor’s Analysts on Meta:
Considering the legal challenges, how does Meta fare from an investment perspective? According to Stock Target Advisor, Meta Platform ‘s stock warrants a ‘Buy’ rating. With a target price of $417.04, Meta is projected to witness a price change of -13.85% over the next twelve months.
Stock Target Advisor’s analysis reveals several positive signals from Meta, including superior risk-adjusted returns, a robust cash flow position, and high market capitalization. On the minus side, there are some potential pitfalls including overpricing.
Backing this, the average analyst target price for Meta is $420.45 over the next twelve months, warranting a ‘Strong Buy’ analyst rating. Evidently, analysts opine that Meta’s positives outweigh the negatives.
This favorable position is also reinforced by Meta’s dominance in the Internet Content & Information sector, alongside big players like Alphabet Inc. Class C (GOOG) and Class A (GOOGL), DoorDash Inc. Class A Common Stock (DASH), and Baidu Inc (BIDU).
However, the sector analysis by Stock Target Advisor casts a slightly bearish shade, indicating negative average returns in the last month and week, cautioning investors to move prudently.
Conclusion:
This investigation underscores the ongoing struggle for social media platforms to balance freedom of expression with preventing illegal activity. Meta’s ability to navigate this complex landscape and mitigate legal risks will likely be a key factor for investors moving forward.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
