Citi Downgrades Alphabet (GOOGL) to Neutral, 'Caution is in Order'
(Updated - May 10, 2021 6:14 AM EDT)
Citi analyst Jason Bazinet downgraded Alphabet (NASDAQ: GOOGL) from Buy to Neutral with a price target of $2,415.00.
The analyst comments "During the last two quarters, Internet ad growth has been quite robust due to: 1) better macro, 2) robust eCommerce and 3) higher retailer web traffic. However, three things make us nervous: First, among the top 10 Internet ad firms, in absolute dollar terms, sell side expects ~2x the annual growth from ’21 to ’25 versus ’18 to ’20. Second, many investors believe ad intensity per dollar of economic activity is rising. We see little evidence of this. Third, even if the sell side estimates are right, growth will likely decelerate after 2Q21 (on tougher comps). Historically, that usually isn’t bullish for multiples."
Shares of Alphabet closed at $2351.93 yesterday.
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