Advertising Growth Will Be Mixed For Big Tech, But Easing Comps Would Help In Late 2024 - One Analyst Asserts

Seaport analyst Aaron Kessler initiated coverage of ten companies within the Internet Sector, including Online Advertising, e-commerce and Transaction Models, and SMB Services and Web Presence companies.

Kessler had a Neutral rating on Alphabet Inc GOOG Google, a Buy rating on Meta Platforms Inc META with a price target of $365, a Buy rating on Pinterest, Inc PINS with a target of $33.

The analyst expects modestly improving ad growth for Alphabet in the second half of 2024, though macro pressures remain. 

Kessler is optimistic about the cloud long-term and remains upbeat on Google's AI positioning. He projects Q3 revenue of $61.35 billion vs. consensus $71.56 billion and EPS of $1.46 vs. consensus $1.36.

For Meta, he expects accelerating ad growth in the second half, user engagement trends to remain solid (Reels), and improved cost discipline to drive substantial earnings leverage. Kessler expects continued ad momentum from Reels, AI, and business messaging.

He projects Q3 revenue of $33.43 billion vs. consensus $31.65 billion and EPS of $3.49 vs. consensus $3.42.

For Pinterest, strong engagement trends (mobile, GenZ) expect accelerating ad growth in 2024 with an increased focus on ad monetization and a meaningful runway for long-term monetization.

He projects Q3 revenue of $743.7 million vs. consensus $743.4 million and EPS of $0.23 vs. consensus $0.20.

Price Action: GOOG shares traded higher by 1.41% at $139.85 on the last check Tuesday.