Investors should hold off on Meta as it heads into earnings this week, according to Bank of America. Analyst Justin Post downgraded shares of Meta to neutral from buy, saying there is likely greater ad spending pressure ahead that could hurt Meta’s Reels business. “[While] 4Q & 2023 expectations have been lowered, we expect advertiser budget cuts in early 2023 to weigh on sentiment and drive added uncertainty on post-IDFA changes and Reels transition,” Post wrote in a Monday note. “We expect 4% y/y growth in 2023 ($120bn in rev) vs Street at 9% ($127bn) and see some downside risk to our estimates in a recession.” The analyst also lowered his price target to $150 from $196. The new target implies upside of roughly 15% from where shares closed Friday at $130.01. Meta shares dipped 1.7% in the premarket Monday. The analyst said that lower content consumption on Snap has made the firm cautious on whether Meta could successfully transition users to Reels. Shares of Meta are already down 61.4% this year as the social media company struggles with near-term pressures. “With total FB/IG y/y time spent was stable to slightly down per SensorTower in 3Q, Reels usage ramp is not proving to be incremental, and time spent is likely down on more valuable social content, in our view. This platform shift adds longer-term gross margin and competitive uncertainty,” read the note. Still, the analyst expects that Meta’s ad revenue growth could accelerate again in the second half of 2023 as it gets past near-term pressures on economic growth. Meta is slated to report earnings Wednesday after the bell. —CNBC’s Michael Bloom contributed to this report.