4 Analysts Raise Alphabet Price Targets After Earnings

Alphabet Inc GOOGLGOOG reported its third-quarter revenues and earnings ahead of the Street expectations. Despite that, the stock remained broadly flat after the release. Here is a preview of the results by leading analysts.

Alphabet’s Results

• Earnings: $27.99 per share, versus the consensus estimate of $23.50 per share.
• Revenue: Climbed 41 percent year-over-year to $65.12 billion

Alphabet Earnings Review by Justin Post of BofA Securities

Post maintained a Buy rating for the stock, while raising the price target from $3,150 to $3,210.

“We think three of four key drivers for the stock (revenue trends, y/y core margin trends, disclosures, and use of capital) were positive in 3Q,” the analyst said.

“Revenue growth decelerated but was strong vs peers and above Street expectations, y/y core margins continued to improve, and Google made $12.6bn in stock repurchases,” he added.

Post pointed out Google Cloud’s operating margins were disappointing, especially in view of the recent cloud margin expansion. “We have pushed out Cloud breakeven,” he added.

Alphabet Earnings Review by Justin Patterson of KeyBanc Capital Markets

Patterson reiterated an Overweight rating for the company, while slightly raising the price target from $3,071 to $3,090.

“Growth was broad-based, with strength across verticals. We continue to view Search's breadth of advertisers and proven ROI as making Alphabet more durable than other ad peers in the current market environment,” Patterson wrote in the note to clients.

Alphabet Earnings Review by Aaron Kessler of Raymond James

Kessler reiterated an Overweight rating while raising the price target from $3,200 to $3,400.

“Google's growth in advertising was strong and broad-based,” the analyst wrote. “The company continued to benefit from elevated consumer online activity though noted recovery has been uneven globally,” he added.

“Advertising spend was strong and broad-based with particular strength in retail, media entertainment, finance, and travel while Google Cloud also had another strong quarter,” Kessler said.

Alphabet Earnings Review by Tigress Financial

“Ongoing investments in increasing AI capabilities drive improvements in Search and new Pixel 6, enabling the development of more helpful products,” Tigress Financial analysts said in a separate note.

“Alphabet was also less impacted by recent changes to Apple’s iOS 14 privacy updates due to the dominance of its Android mobile operating system within its customer base,” they wrote.

While Alphabet continues to benefit from its leading position in “every key secular technology trend that enables consumers to communicate and access information,” the company is likely to build on its strength in all key technology growth areas,” the analysts added.

Price Actions: Shares of GOOGL had risen by 5.76% to $2,946.56 and GOOG had risen 5.79% to $2,947.30 at publication Wednesday afternoon.