A Look At Meta Platforms Stock As The Company Heads Into Q2 Earnings

Posted by jbrumley on July 27, 2022 9:26 PM

By Melanie Schaffer, Benzinga Editor

  • Meta began trading in an uptrend on June 23, which looks set to continue.
  • For the second quarter, analysts estimate Meta will print earnings per share of $2.61 on revenues of $28.97 billion.

Meta Platforms is set to print its fiscal second-quarter financial results after the market closes on Wednesday. The stock was trading over 6% higher heading into the event.

When the tech giant printed its first-quarter results on April 27, the stock gapped up almost 16% the following day but eventually resumed its downtrend, which brought Meta shares to a 52-week low of $150.98 on June 23.

For the first quarter, Meta reported an EPS of $2.72 on revenue of $27.91 billion. The company beat the EPS estimate of $2.56 but missed the consensus estimate of $28.21 billion in revenues.

For the second quarter, analysts estimate Meta will print earnings per share of $2.61 on revenues of $28.97 billion.

On Wednesday morning, KeyBanc analyst Justin Patterson maintained an Overweigh rating on Meta and lowered the price target from $280 to $190. The new price target suggests about 13% upside for Meta.

From a technical analysis perspective, Meta's stock looks set to trade higher over the coming days, but it should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Options traders, particularly those who are holding close dated calls or puts, take on extra risk because the institutions writing the options increase premiums to account for implied volatility.

The Meta Chart: Meta reversed course into an uptrend on June 23 and printed its most recent higher high at the $183.85 mark on June 21 and its most recent higher low was formed on Tuesday at $157.95. If Meta receives a positive reaction to its earnings print, the stock is likely to rise up to form another higher high and continue in the trend.

  • If Meta receives a negative reaction to its earnings print, and falls below the $157 mark, the uptrend will be negated and a downtrend could form. If the stock drops under the June 23 low-of-day, Meta will make a new 52-week low, which would put the stock in dangerous territory of sliding further.
  • If Meta closes the trading session near its high-of-day price, the stock will print a bullish Marubozu candlestick, which could indicate higher prices will come again on Thursday. If the stock runs into sellers and closes the trading day with an upper wick, lower prices could be in the cards.
  • Meta has resistance above at $173.09 and $181.50 and support below at $164.20 and $154.25.

From Benzinga