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Stock Analyst Update

Expect Minimal Impact on Meta From Sheryl Sandberg’s Departure

We are maintaining our $384 fair value estimate of the Facebook parent or our exemplary rating of the firm’s capital allocation.

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On June 1 Meta Platforms (FB) announced that Sheryl Sandberg, the firm’s current chief operating officer, will resign but will maintain her seat on the company’s board. Her exact resignation date was not disclosed. She will be replaced by Javier Olivan, who has been with the firm since 2007 and is Meta’s chief growth officer and vice president of cross-Meta products and infrastructure. While Sandberg is considered the backbone of Meta’s successful advertising business, she has also surrounded herself with talented colleagues over the years, as the firm’s co-founder and CEO, Mark Zuckerberg, stated to the firm’s employees. For this reason along with the firm’s network effect moat source that continues to attract advertisers to its various platforms, this announcement does not change our $384 fair value estimate of Meta or our exemplary rating of the firm’s capital allocation.

We view the departure of Sandberg as another indication of Zuckerberg and the firm’s focus on metaverse. However, we do not believe Meta’s leadership team will lose sight of just how successful its advertising business has been and can still be going forward. We think for this reason, Zuckerberg stressed that the firm will try to integrate its various business and product groups, which we believe will allow the firm to more efficiently and quickly cross-sell to advertisers and users, possibly accelerating adoption of its metaverse platform, Horizon, by both.

Based on her posting on Facebook, Sandberg does not appear to be joining another firm and plans to focus more on her various charitable work.

Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.