Wedbush analyst Michael Pachter is all over Google’s parent company Alphabet (GOOGL). Pachter has high expectations for the internet giant, initiating coverage with an Outperform rating and a 12-month price target of $1,350 per share, implying nearly 20% upside for the tech giant. (To watch Pachter’s track record, click here)
Pachter says the praise is warranted due to the company’s pervasive presence in the fields of advertising, general searches and Android cell phones. Furthermore, Pachter sees “a compelling valuation and an unrivaled collection of high-profile and omnipresent core products and platforms.”
The analyst offers his observations of how advertising, Google searches and smart phones are heavily influenced by Google. The success in all three mediums make him optimistic about the future, while bearing in mind Amazon and Facebook’s presence could leave Google out in the long term.
With that in mind, here are 3 reasons why Pachter believes Google is a ‘top dog:’
- Digital Advertising – The analyst notes that Google generated ad revenues of $106 billion dollars, which soars above western competitors, including Facebook and Amazon.
- Google searches – NetMarketShare, a statistics research company for technology reported in September of 2018 that Google searches on desktops, phones and tablets were 78%, 76% and 86% respectively. The analyst suggests any person from any place will likely turn to Google to look something up, especially if he or she doesn’t know where to begin. That’s a strong position to take in the market of searches.
- Androids – The fact that Androids are Google, means searches are done through the Chrome browser, which stands as the default browser for most of the world’s smart phone users. In addition, all the data collected through Androids marketing leadership contributes greatly to its success. Android’s market leadership has greatly enhanced Google’s data collection efforts, with that strength augmented by the fact that Chrome is the default browser for most of the world’s smartphone population
Pachter might be giving Alphabet three cheers, but his price target is still lower than the Street’s average target price, which stands at $1,388.63. Out of 34 analysts surveyed by TipRanks in the last three months, 31 suggest it’s a Buy, while only 3 recommend a Hold. (See GOOGL’s price targets and analyst ratings on TipRanks)