CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We up our 12-month target to $157 from $142, on a P/E of 21x our 2025 EPS estimate, which we initiate at $7.46, below its historical forward averages. We keep our 2023 EPS estimate at $5.70 but raise 2024 to $6.57 from $6.44. Ahead of Q3 results set after the close on 10/24, we see upside to Q3/Q4 consensus views given improving trends within both Search and YouTube along with robust cloud growth. We conservatively look for GOOGL Search growth of 6% to 8% in Q3/Q4 (5% in Q2/2% in Q1), as digital ad trends remain favorable while greater AI emphasis supports higher ROI and overall ad spend. We see YouTube growth accelerating to over 10% in Q3/Q4 (+4% in Q2), on easier comps, greater Shorts monetization, and NFL Sunday Ticket traction. We see cloud growth of 28%-30% in Q3/Q4, near the 28% pace in Q2 and improving operating profit from greater scale. Although we view AI momentum as more of a 2024 story, timing/availability on initiatives like GOOGL’s SGE and Gemini will be critical to monitor.