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Alphabet on Strong Footing, Could Scale to Fresh Record High on Upbeat Q3 Earnings

By:
Vivek Kumar
Published: Oct 22, 2021, 15:39 UTC

“We remain bullish on Search strength amid an ongoing ad market recovery and following our Digital ad expert check-call on 10/7, which suggested strong Search spend (despite tougher comps) as CPCs continue to drive growth. Our 3Q21 net rev. (+39% y/y), EBITDA, & EPS are all above consensus. We also expect robust Holiday spending, despite inventory issues. Maintain Outperform & $3,300 Price Target,” noted John Blackledge, equity analyst at Cowen.

Alphabet

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The parent of Google and the world’s largest search engine that dominates internet search activity globally, Alphabet, is expected to report its third-quarter earnings of $23.84 per share, which represents year-over-year growth of about 45% from $16.4 per share seen in the same period a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 35% to around $51.4 billion. In the last two years, the company has beaten earnings per share (EPS) estimates most of the time with a surprise of over 25%.

Alphabet’s better-than-expected third-quarter earnings results, which will be announced on Tuesday, October 26 after the close of trading, could help the stock scale to a fresh record high. The company’s shares rose over 57% so far this year. It was trading 2.68% lower at $2,761.66 on Friday.

Analyst Comments

“We remain bullish on Search strength amid an ongoing ad market recovery and following our Digital ad expert check-call on 10/7, which suggested strong Search spend (despite tougher comps) as CPCs continue to drive growth. Our 3Q21 net rev. (+39% y/y), EBITDA, & EPS are all above consensus. We also expect robust Holiday spending, despite inventory issues. Maintain Outperform & $3,300 Price Target,” noted John Blackledge, equity analyst at Cowen.

“We currently forecast 13% and 14% annual gross and net revenue growth respectively’21-’26 and EBITDA growth of ~14% over the time period.”

Alphabet Stock Price Forecast

Thirty-one analysts who offered stock ratings for Alphabet in the last three months forecast the average price in 12 months of $3,209.24 with a high forecast of $3,600.00 and a low forecast of $3,000.00.

The average price target represents a 16.32% change from the last price of $2,759.00. All of those 31 analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of $3,000 with a high of $3,500 under a bull scenario and $2,100 under the worst-case scenario. The firm gave an “Overweight” rating on the information services provider’s stock.

Several other analysts have also updated their stock outlook. Mizuho raised the price target to $3,100 from $3,000. Bernstein lifted the target price to $3,250 from $3,200. RBC initiated the coverage with outperform rating and a $3,400 target price.

Check out FX Empire’s earnings calendar

About the Author

Vivek has over five years of experience in working for the financial market as a strategist and economist.

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