Alphabet (GOOGL): Initial 1Q Thoughts, GBH Reiterates $1,280 Price Target


The Street was anxiously looking toward the internet giant’s quarterly report as it had a major “show me” quarter in light of disappointing fourth-quarter results.

This evening, Google parent Alphabet (NASDAQ:GOOGL) reported first-quarter earnings per share of $9.93 on revenue of $31.15 billion, beating consensus expectations of $9.28 and $30.29, respectively.

So why then did Alphabet shares slightly fall? GBH analyst Daniel Ives points out that while advertising revenues came in ahead of Street expectations, the bulls were hoping for a bigger beat around some of the underlying metrics with much angst around search and YouTube advertising revenues in light of recent regulatory swirls post Cambridge/Facebook.

Ives rates Alphabet stock Highly Attractive, while reiterating a price target of $1,280, which implies a 19% upside from Monday’s closing price. (To watch Ives’ track record, click here)

The analyst concluded, “To this point, while fundamental worries coupled by regulatory black clouds continue to be overhangs on the name, we believe 1Q advertising and “bread and butter” search revenues were healthy and a good barometer of potential strength heading into the rest of 2018. TAC trends will again be a focus this quarter, as mobile advertising impression success remains a key going forward for Google in this very competitive land grab market opportunity with rising costs front and center. Overall, we believe “good enough” 1Q earnings and guidance could be a positive catalyst for shares with much fuel left in the growth tank in our opinion, although this will continue to be a battlefield stock over the coming months with the bulls/bears both hanging their hats on various metrics following this earnings report.”

Most analysts on Wall Streets are out rooting for this tech titan to be a winning stock pick, as TipRanks analytics showcase GOOGL as a Strong Buy. Based on 27 analysts polled in the last 3 months, 25 rate a Buy on Alphabet stock while only two maintain a Hold. The 12-month average price target stands at $1,306, marking a nearly 22% upside from where the stock is currently trading.