A new analysis from Morgan Stanley presents a compelling long-term view for Meta Platforms, Inc., forecasting earnings per share (EPS) to reach approximately $33 by the 2027 fiscal year. This bullish projection arrives alongside a trimmed price target, highlighting the complex investment narrative surrounding the social media giant as it navigates massive capital expenditure cycles.
Revised Target and Robust Fundamentals
Despite the optimistic earnings outlook, Morgan Stanley’s equity researchers adjusted their price objective downward from $820 to $750. They maintained an Overweight rating on the stock. This apparent contradiction stems from anticipated soaring operational costs, even as the company’s underlying performance remains strong.
The bank’s forecast is grounded in solid recent results. For Q3 2025, Meta reported EPS of $7.25, surpassing consensus estimates of $6.74. Revenue saw significant growth, climbing 26.2% to $51.24 billion. The company’s net margin stood at nearly 31%.
The AI Investment Surge
The primary driver for the revised price target is a projected dramatic increase in operating expenses. Morgan Stanley models these costs to hit $155 billion in 2026, escalating further to $187 billion in 2027. The vast majority of this capital is earmarked for artificial intelligence infrastructure, including data centers to support next-generation AI systems.
Should investors sell immediately? Or is it worth buying Meta?
Key implications of the analysis include:
* Revenue projections that sit 2-4% above current consensus estimates.
* Earnings expectations for 2026 and 2027 have been reduced by roughly 8%.
* The long-term EPS goal of $33 for 2027 remains firmly in place.
Potential Catalysts on the Horizon for 2026
Looking ahead, market experts point to three specific catalysts that could influence Meta’s share price next year. First, revenue forecasts may see upward revisions. Second, by spring 2026, the company is expected to provide more detailed guidance on its operational expenditure trajectory. Third, the anticipated launch of a “Frontier Model” from its internal Superintelligence division could demonstrate tangible returns on its multi-billion dollar investments.
Simultaneously, reports suggest Meta is considering cost-cutting measures elsewhere, including a potential 30% reduction in staffing within its Reality Labs division, which houses the Metaverse initiatives. This segment is viewed by many shareholders as a persistent drag on profitability.
Meta shares are currently trading at $652.71, moving within a recent range of $620 to $685. The company has also declared a quarterly cash dividend of $0.525 per share, payable on December 23. This translates to an annualized dividend of $2.10 per share.
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