Evercore ISI’s Mark Mahaney has a new top pick, and it’s one of last year’s biggest losers: Meta Platforms . The tech analyst made the Facebook-parent the No. 1 stock on his list, moving it up from No. 3 spot, citing a more positive outlook for the social media firm. Meta replaces Netflix in the top spot. Meta is working to improve its cost structure after Covid, the analyst said. What’s more, the social media company is recovering more advertising dollars, and its Reels business has a pathway to close the monetization gap, according to his checks. “META still remains the leading global Social Media & Messaging platform, and Q4 results demonstrate rising users and engagement. And the business model is still high margin and high [free cash flow] generating,” Mahaney wrote in a Wednesday note. In addition, he expects Meta shares can jump 48% from Wednesday’s close to his $275 price target. The stock is up 0.5% during Thursday trading. META 1Y mountain Meta shares 1-year Meta is outperforming this year after lagging the market and its Big Tech brethren last year. In 2022, the social media stock dropped 64% to lag Alphabet, Amazon, Apple and Netflix. Netflix, the second-worst performing firm of that group, fell 51% last year. This year, however, Meta shares are up more than 50% amid a broader run-up in internet stocks and the company’s focus shift toward efficiency . Mahaney expects investors are in search of quality names after the carnage in tech stocks last year. Of those tech stocks that have soared more than 50% in 2023, Mahaney identified Meta is a high quality name. “We believe this has been more of a Quality Rally than a Speculative Rally, given that 82% of the ‘Net Large Caps have outperformed the S & P 500 YTD, whereas only 54% of the ‘Net SMiD Caps have,” Mahaney wrote. —CNBC’s Michael Bloom contributed to this report.
