Alphabet (GOOGL) and Meta (META) Remain BofA's Top Value Internet Stocks

Bank of America analyst Justin Post has reiterated the firm’s positive stance on Alphabet (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META), which are still seen as the top value stocks within the Internet stock.

Still, Post acknowledges that Street estimates for Alphabet/Meta advertising revenues are likely too high for 2023. Moreover, Increasing TikTok competition and AVOD could capture over $5 billion from industry growth.

As a result, Post lowered estimates on GOOGL and META to reflect mild recession and FX headwinds. These slashed estimates are then reflected in lowered price targets - $196 per share on META stock and $114 on GOOGL shares.

On the other hand, EPS is expected to prove to be more resilient given cost-cutting activities.

“While the outlook for 2023 advertising revenue has deteriorated over the past 6 months, we think negative sentiment and lower valuations make for a more attractive investment backdrop, Alphabet’s Performance Max and Meta’s Reels monetization can be important revenue drivers in 2023,” Post said in a client note.

By Senad Karaahmetovic

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