Google, Top Pick Among Internet Stocks, Continues To Exceed

Alphabet Inc GOOGL has continued to “build on recent business momentum driven by mobile search & YouTube,” UBS’ Eric Sheridan said in a report. He maintained a Buy rating on the company, with a price target of $925.

Sheridan named Alphabet as the top pick for Internet investors, stating that the company generates above-industry revenue growth and strong FCF, and has “a host of long-tailed opportunities.” He termed Alphabet’s share buyback reauthorization for $7.019 billion as “another leg of support” for the company’s shares at the current levels.

Q3 Report

Alphabet delivered strong mobile search and YouTube performances. Other revenues at core Google also came in ahead of expectations, backed by Google Play & Google Cloud. Sheridan believes that “a successful hardware/software strategy now sits on the horizon to drive further growth.”

Share Performance

Alphabet’s shares have performed in-line with the SPX year-to-date, given concerns surrounding deceleration in ad revenues in the back half of 2016. The analyst stated that the Q3 results would likely “push Alphabet toward sustained outperformance over the coming quarters.”

The net revenue, adjusted EBITDA and adjusted EPS estimates have been raised from $72.75 billion to $72.89 billion, from $36.02 billion to $35.90 billion and from $33.95 to $34.43, respectively.