UPDATE: UBS Assumes Alphabet (GOOGL) at Buy, Favorite Name in Online Advertising
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UBS analyst Lloyd Walmsley assumes coverage on Alphabet (NASDAQ: GOOGL) with a Buy rating and a price target of $3,925.00.
The analyst comments "We think Alphabet shares can see positive estimate revisions and multiple expansion on the back of faster than expected top line growth and margin inflection at Google Cloud. We think investors are overly dismissive of Cloud's ability to move the needle based on the relative size of its potential EBIT contribution. Our analysis suggests that the Cloud value attribution could add 7-12% annual tailwind to shares if this can be realized in the next two years. Our thesis is predicated on analysis of the Google Cloud's revenue backlog and supported by channel checks around how consumption ramps from new deal signings. We think strong top line and margins will become evident in the Google Cloud segment over the next 12 months. We rate Alphabet shares Buy with a target of $3,925 and see it as our favorite name in the online ad space."
Shares of Alphabet closed at $2821.03 yesterday.
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