Deutsche Bank cuts Meta target to $800 as Q2 earnings approach

Deutsche Bank lowered its Meta Platforms price target to $800 from $810, maintaining a buy rating five days before the company's Q2 earnings report.

The $10 reduction trims the bank's valuation view by 1.2 percent. Deutsche Bank's new target still implies roughly 34 percent upside from Meta's current price of $595.19, which has fallen 9.7 percent year to date and sits well below its 50-day moving average. The stock has declined 7.9 percent over the past week alone, underperforming the Nasdaq 100's 3.2 percent drop.

Meta reports fiscal second-quarter results on July 29 after the market close. The company has beaten earnings-per-share estimates for six consecutive quarters, with the last miss dating to Q3 2022. Prediction markets assign an 87 percent probability of another beat, according to Polymarket data, while options pricing shows a put-to-call ratio of 0.43 on the July 31 expiry — a bullish skew. Consensus estimates call for $60.2 billion in revenue on $7.18 a share of earnings.

The broader analyst community remains decisively bullish on Meta. Wall Street carries 57 buy ratings, six holds and zero sells on the stock, with a consensus price target of $826 — implying 39 percent upside from current levels. Meta trades at 18 times forward earnings despite delivering 33 percent revenue growth in Q1, when it posted $56.3 billion in sales and a 41 percent operating margin. By comparison, Alphabet trades at 25 times forward earnings with 24 percent revenue growth in its most recent quarter, while Snap operates at a negative operating margin.

The price target cut comes as investors scrutinize Meta's rising capital expenditure, which the company guided to between $125 billion and $145 billion for fiscal 2026. Meta spent $19 billion on capex in Q1 alone, up 47 percent year over year, while maintaining positive free cash flow of $12.4 billion. Chief Financial Officer Susan Li has said the company retains flexibility to slow infrastructure spending if returns lag.

The capex debate is the central tension in Meta's investment case. The company's Family of Apps segment generated $55.9 billion in Q1 revenue, more than enough to absorb the $4 billion operating loss at Reality Labs, the augmented and virtual reality division. Meta's return on invested capital stands at 20.7 percent, with a debt-to-equity ratio of 0.39 and interest coverage of 71 times. After Meta's Q1 report, the stock returned 16.5 percent over the following 30 days, nearly double the Invesco QQQ Trust's 9.5 percent gain.

The Deutsche Bank revision is small in magnitude but adds to the narrative tension ahead of Meta's earnings. The bank joins a Wall Street consensus that remains overwhelmingly bullish, with no sell ratings on the stock. Investors will watch the July 29 call for updates on ad revenue momentum, capex plans and whether AI infrastructure spending is expanding margins rather than eroding free cash flow — the central debate driving Meta's stock this year.

This article is for informational purposes only and does not constitute investment advice.