Citi said Meta Platforms' $18 billion settlement with 52 U.S. state attorneys general over teen usage removes a major overhang, and that the operational hit should prove manageable. Analyst Ronald Josey wrote that the settlement, assuming YouTube and TikTok join, removes a significant overhang and comes as Meta's AI product roadmap emerges. Under the consent order, teens aged 13 to 17 on Facebook and Instagram face a two-hour daily limit, along with night and school usage blocks and prompts after continuous use. Citi argued the practical impact is limited, noting the average teen uses Instagram about an hour a day, teens account for less than 1% of Meta's revenue, and they are already excluded from certain ad targeting. The bank also noted the settlement is well below the $200 billion and $1.4 trillion amounts initially contemplated by state AGs, and that Meta will take a $10 billion legal expense accrual in the third quarter, lifting 2026 expense guidance. Citi reiterated its Buy rating and $800 price target, flagging Meta Connect on Sept. 23 as a catalyst.
Meta Platforms Inc.Settlement removes legal overhang, with limited operational impact and manageable costs.
Citigroup Inc.