Google parent company Alphabet has earned several price target increases from already-bullish firms following last night’s earnings report. At least firm is betting that the Internet firm’s shares soar past $1,000 as it dances around the ring with Apple in a fight for the title of the world’s most valuable company.
Google’s parent posted revenue of $21.33 billion and non-GAAP earnings of $8.67 per share, beating the consensus estimates of $16.9 billion and $8.10 per share. Deutsche Bank analyst Ross Sandler sees Alphabet shares climbing to $1,080 as he believes the re-rating that’s going on is now about two-thirds of the way through. His previous estimate for the stock was $900, and he continues to rate it as a Buy.
He noted that the company is one of only a few global tech firms with more than $20 billion in revenue per quarter and that’s consistently growing faster than 20% on a constant currency basis on both the top and bottom lines. Additionally, he said the company is seeing a re-acceleration, adding that all of these positives are ‘truly astonishing feats.”
Sandler’s $1,080 price target makes him one of the Street’s biggest Alphabet bulls, if not the biggest by far.
Alphabet surpasses Apple as the world’s most valuable company
Following last night’s earnings report, Alphabet shares climbed and are up 2.96% at $793.61 per share as of this writing. Apple shares, meanwhile, have continued to slip and are down 1.55% at $94.94 per share as of this writing. At this morning’s open, Alphabet passed Apple in market capitalization, reaching a cap of $547.1 billion, compared to Apple’s $529.3 billion. The iPhone maker has been the world’s most valuable company for quite some time after dethroning ExxonMobil several years ago.
According to CNBC, it’s been about six years since Google’s market cap was greater than that of Apple, and at that time, both of them were worth less than $200 billion. From 2008 until early 2010, the two tech giants traded positions several times until Apple skyrocketed, soaring safely out of Google’s reach and climbing from $180 billion to surpass $650 billion in September 2012.
Other price target increases for Google
Analysts are generally positive on Alphabet’s earnings, with many highlighting the new reporting structure in addition to the solid beats on the top and bottom lines. Morgan Stanley analyst Brian Nowak, who raised his price target on the company to $880 a share, said the new structure highlights the strength of the core Google business. He added that the Other Bets segment’s losses of $3.1 billion in the fourth quarter were significantly better than his estimate of about $7 billion in losses.
Baird analyst Colin Sebastian and his team also raised their price target for Alphabet, pushing it up from $780 to $880 a share and reiterating their Outperform rating. They highlighted that the Google core business returned strong results on the back of solid growth in mobile, YouTube and Programmatic Display ads.
B Riley analyst Sameet Sinha also joined the club in raising price targets, bringing the firm’s target from $853 to $930 a share, as did Stifel analyst Scott Devitt, who raised his price target from $900 to $930. Goldman Sachs’ Heather Bellini upped her target from $850 to $890, while Barclays analyst Paul Vogel moved his target from $800 to $900 and Credit Suisse analyst Stephen Ju raised his target from $900 to $930.