Mizuho Slashes Google's Price Target By 14% To Reflect Headwinds For Its Cloud, Advertising Businesses

Mizuho analyst James Lee's Alphabet Inc GOOG GOOGL Google advertising call indicated 2Q22 pricing trends remained strong from mix shift to travel/services, increased offline retail demand, and ad pricing inflation.
However, he believed consensus FY23 revenue growth of 15% Y/Y appeared aggressive given the likelihood of consumer spending slowdown.
Also, his cloud computing call indicated CIOs were likely to reduce FY23 spending growth by 10 points from the slowing economy.
Therefore, he believed consensus GCP's revenue growth of 32% Y/Y was aggressive.
Lee cut his FY24 EBITDA by 8% to $146 billion, roughly 6% below consensus.
Lee reiterated a Buy on the stock and reduced his price target from $175 to $150.
He expected Alphabet to be more resilient than peers, given its diverse advertiser base capturing offline and service revenues.
Price Action: GOOG shares traded lower by 3.43% at $111.10 on the last check Friday.

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