Meta Platforms (FB) Stock News and Forecast: Is it time to buy the Facebook parent?
- Facebook's parent rallies over 5% on Wednesday to close at $232.
- Meta shares have collapsed following earnings, but is the fall over?
- Meta Platforms shows up as oversold on the RSI.
Shares of Meta Platforms (FB), the parent of Facebook and Instagram, staged a strong bounce on Wednesday, but the question for investors is whether this bounce is of the dead cat variety or something more sustainable. Basically, at this stage, you are betting on a transformation of the business.
Facebook user growth looks to be stalling, certainly in the developed world. Facebook has monetized WhatsApp, but more may be to come in this space. Instagram is facing competition from TikTok and other video media. Meta Platforms is gambling big on the metaverse, hence the rename and rebranding, so is it time to buy?
Meta Platforms Stock News
The earnings debacle is by now old news and well pored over. Slowing user growth and a huge investment in the metaverse saw a weak outlook, which led to the largest market cap loss in history. Now Meta has shown up on many stock screeners as oversold. The Relative Strength Index (RSI) hit 21 yesterday. Most technical analysts use 30 to indicate oversold, but 20 weeds out false signals. Either way, 21 is pretty close to strongly oversold.
That helped to fuel yesterday's strong rally in FB stock. Is it sustainable though or are we witnessing the beginning of the end for Meta Platforms? The Wall Street analyst community is certainly sticking with the company. In the last seven days, only Loop Capital Markets have downgraded the stock as far as we can see. Many have lowered price targets, but most investment banks have kept their buy rating on Meta stock. The current average price target is $332 from 44 Wall Street analysts, which is well above the current price.
Meta Platforms Stock Forecast
As mentioned then the RSI is significantly low and near the oversold level. This has led to many stepping into FB already. We do note the old market adage that a first profit warning is usually not the last. While the recent earnings were not a profit warning per se, they certainly felt like it. Nothing goes down in a straight line, however, and it may be time to step in for a short-term bounce. The RSI and Moving Average Convergence Divergernce (MACD) look overdone, and this move has stopped short of support at $207. That is the key medium-term level to hold. $244 is the key medium-term resistance to get above.
Facebook (FB) chart, weekly
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
