Investors seeking stability and value in the internet stocks market need look no further than Alphabet, according to recent research by Canaccord Genuity analyst Maria Ripps.
Ripps has upgraded shares of Alphabet, the parent company of Google, from Hold to Buy. She has also revised her price target for class A Alphabet stock to $1,250, up from $1,140.
Alphabet’s shares have struggled in the past year, declining 5.5% compared to the S&P 500. Currently trading near $1,033, the stock experienced a 2% drop as major US indexes faced a decline.
Recognizing the potential for continued stock market volatility, Ripps identified Alphabet as the most defensive option among the ‘FANG’ stocks due to its consistent performance and reasonable valuation.
Canaccord Genuity projects that Alphabet will achieve revenue growth of approximately 15% to 20% over the next two to three years. This growth trajectory is expected to contribute to an annual earnings-per-share growth rate exceeding 15% through 2022. The anticipated success is attributed to buybacks and expanding gross margins.
The growth of digital advertising in relation to overall advertising and marketing spending serves as a significant factor in driving Alphabet’s success. Ripps notes the “manageable” competition from Amazon.com’s growing advertising business, which further supports Canaccord Genuity’s positive outlook on Alphabet’s potential.
Alphabet emerges as an attractive investment choice for those seeking stability and value amidst market fluctuations. With its promising growth prospects and favorable market conditions, Alphabet’s stock is certainly one to watch.
Google Dominates the Global Digital Advertising Space
According to a recent article by Ripps, Google maintains a dominant position in the global digital advertising space, especially in search and ad-supported digital video. Currently, Google holds approximately 20% of the total global advertising spend and about 45% of the global digital ad spend. This strong market position positions Google as a prime beneficiary as marketing budgets transition to digital media platforms.
Tech Giants and Regulation
Ripps suggests that despite the possibility of regulation targeting market “power” and privacy concerns, tech giants like Google are well-equipped to handle these challenges due to their substantial financial resources and large audience bases.
Price Targets and Stock Analysis
Canaccord, an investment research firm, has set a price target for Alphabet stock that shows a potential 21% upside from current prices. However, Factset’s average price target for Alphabet is slightly higher at around $1,349. Evercore ISI has also identified Alphabet as one of their top internet picks for 2019.
Additionally, Ripps has adjusted her price targets slightly for other tech companies, Facebook (FB), Snap (SNAP), and Twitter (TWTR), all of which remain above their current prices.