Meta Platforms (META, Buy, Raising target to $900 from $775) Five new revenue breakouts in our model

We’ve added five new revenue breakouts in our model, four of which are incremental revenue: New ad load on 1) Threads, 2) WhatsApp and in 3) Facebook Notifications. We expect Threads to be the most material, reaching ~$7B in revenue by 2030, while the other two total ~$5B. We break out 4) the European No Ads subscription and add the new 5) WhatsApp Channel Subscriptions to the Family of Apps Other revenue model.

Daily Views on Tech Headlines

Daily Views on Tech Headlines

Model update

This report contains forecasts updated for reported Q218 results. Neither our financial nor PSU estimates are materially changed and we remain Overweight with a 12m PT of $365.

V/MA: strong core, adjacencies more competitive

V/MA remain core long term holdings with secular cash to card tailwinds driving strong growth long term, supported by developments such as contactless. Valuation remains reasonable, although newer growth areas such as B2B face greater competition. We remain Overweight V/MA, raise our price targets to $173 and $250 respectively and currently favour V which trades on a PE of 28x, three turns lower than MA.

Banks: Trading update and 3Q18 preview

Market volatility has moderated significantly since the beginning of the year, ceasing to be a tailwind for the banks' trading revenues in 3Q18. Despite the strong IB pipelines (announced M&A is up 40% YTD), fee pools have been affected by timing issues and are down 15-20% across the industry for the current quarter. Medium term, the outlook remains positive thanks to improving GDP growth, benign credit conditions, rising interest rates and a deregulatory focus. We have lowered our 3Q18 EPS estimates by 3% on average. Our longer term forecasts decline only modestly by 1%. C remains our t...