The stock price target of Alphabet Inc., Google’s parent company, was cut by Monness Crespi Hardt on Tuesday as positive trends in digital advertising and cloud growth collide with an apparent recession and a turbulent market environment.
The stock of search and digital advertising heavyweight GOOGL,
fell 1.3% in premarket trading, after falling 7.8% amid a five-day losing streak through Friday.
Analyst Brian White lowered his 12-month price target to $2,900 from $3,500. White maintained his buy rating on Alphabet.
Like other tech companies, Alphabet is preparing for turbulent times, but White believes the company is well-positioned to emerge stronger “on the other side.”
“We believe Alphabet will benefit from long-term digital advertising trends, experience healthy secular growth in the cloud and repurchase stock at a generous pace,” Monness Crespi Hardt analyst Brian White wrote in a note. “[H]However, the economy appears to be in recession, regulatory headwinds persist, stock markets are boiling, and we expect the geopolitical landscape to become more precarious.
In April, Alphabet announced a $70 billion share buyback program, a significant increase from the $50 billion share buyback it authorized last year.
Alphabet shares have fallen 24.93% this year, topping the SPX of the S&P 500,
decrease of 19.11%.
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Of 50 analysts polled by FactSet, 48 have a buy or overweight rating on Alphabet and two have a hold rating. The stock’s average price target is $3,161.85, implying about a 45% upside from Friday’s closing price.
Alphabet shares have fallen 249% year-to-date through Friday, while the Nasdaq COMP composite index,
fell 28.9% and the S&P 500 SPX index,