Alphabet (GOOGL) Breakup Could Increase Share Price by 50% - Needham

Needham & Company analyst Laura Martin reiterated a Buy rating and $1,350.00 price target on Alphabet (NASDAQ: GOOGL) after the company reported strong 2Q19 results with revenue of $38.9B up 19% y/y and GAAP EPS of $14.21 up 21% y/y.

In addition to the upside, GOOGL announced a new $25B share repurchase program however, the analyst thinks the company should consider proactively breaking itself up due to regulatory concerns. She believes that it could unlock another 50% of value. The analyst stated "GOOGL gave more detailed insights into Cloud and YouTube for 2Q19, which is also helping its shares, we believe. US “Techlash” suggests a regulatory environment for GOOGL and all “Big Tech” that is best-case neutral and worst-case value-destructive. We believe that GOOGL should proactively break itself up into 2 or 3 pieces, which would create incremental value". "We calculate that GOOGL in pieces is worth 50% more than GOOGL as a conglomerate (ie, status quo)".

For an analyst ratings summary and ratings history on Alphabet click here. For more ratings news on Alphabet click here.

Shares of Alphabet closed at $1234.00 yesterday.

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