Barclays Analyst Ross Sandler acknowledged that investors are “rightfully cautious” about the growth path of digital advertising in 2022, particularly in the second quarter.
In 2022, TikTok will grow from $4 billion in ad revenue (excluding China) to over $12 billion and is on track based on Barclays channel audits. Apple has also ventured into the digital advertising space, growing sales to over $7 billion.
Looking at the drop in total spending, they saw that both players took 1/3 of every extra dollar in 2022, breaking the previous trend. alphabet inc GOOD GOOD Google, Facebook rename Meta Platform Inc meta and Amazon.com Inc. AMZN trio.
Sandler believes there’s a “perfect storm” here in Q2 given the decline in spending and conversions across the internet ecosystem, an “ascending trajectory,” and clear stiff competition from new contenders like TikTok and Apple. Is.
He believes this “event cocktail will likely generate the lowest growth rate for the industry in years.” But stock valuations are already reflecting some of that, argues Sandler.
Sandler lowered price targets for three major social media companies, citing broad economic vulnerabilities and repricing in the tech world.
Sandler cut the price target on meta from $370 to $280 and reiterated an overweight stance. they lowered the price target Pinterest, Inc. PINS ranged from $20 to $24 and held a similar load. Sandler also lowered the price target snap inc The snap ranged between $42 and $20 and remained overweight.
Sandler chose Facebook as the business prospect for T+1, with its consensus EPS coming closest to the correct level. He noted that multiples were down more than 30% from December and more than 20% from pre-pandemic levels (excluding GOOG), making pricing bad news.
He saw multiples for the large-cap internet shrink 50% in 2009. So, depending on the severity of the current cycle, he saw her by well over half.
Price promotion: Meta shares were up 1.91% at $163.09 at last check on Tuesday.
Unsplash by Olivier Bergeron. photo above