TD Cowen has joined the bullish majority on Meta with just half of the social media company’s “Year of Efficiency” in the rearview mirror. Analyst John Blackledge upgraded the Facebook parent’s stock to outperform from market perform and raised his price target to $345 from $220. Blackledge’s price target implies upside potential of 11.5% from Wednesday’s close. “In retrospect, we underestimated Meta’s willingness to significantly cut costs after providing initial ’23 opex and capex guide at 3Q22 earnings that was well above street expectations,” he said in a note to clients Thursday. “Shortly after setting guide, Meta mgmt. did a complete 180 by instituting headcount cuts and other cost initiatives as part of what they deemed the year of efficiency.” Shares rose 1.6% in premarket trading on Thursday. The stock has rallied more than 150% this year, but hasn’t totally erased losses from 2022’s 64% slide. META 5Y mountain Meta shares over the last five years Blackledge said Wall Street will likely need to raise estimates, pointing to potential monetization growth in Reels. A Cowen survey shows Reels has grown engagement and helped raised overall time spent on Instagram. Cowen raised revenue and earnings estimates by 8% and 7%, respectively, on average over the next five years and is above consensus estimates for both second quarter and full-year earnings. Beyond Reels, he said there are other ad formats and products that could come in the longer term. Share upside could also come from further cost cuts, as Cowen is still forecasting nearly $14 billion in Metaverse losses this year. This expected loss comes despite Meta’s cost-cutting initiatives including layoffs and a spin-out taken this year as part of what CEO Mark Zuckerberg has described as a “Year of Efficiency” in 2023. Threads, Meta’s new social media platform seen as an alternative to Twitter , has gotten over 100 million signups in the first five days. Blackledge said the company could begin monetizing on the platform if engagement continues to grow. Blackledge’s upgrade places him in the majority on Wall Street, with more than four out of every five analysts holding buy ratings on the stock, according to Refinitiv. — CNBC’s Michael Bloom contributed to this report.