Bernstein Reiterates Market Perform Rating on Alphabet, $345 Price Target
Bernstein SocGen Group analyst Mark Shmulik reiterated a Market Perform rating and $345.00 price target on Alphabet (NASDAQ: GOOGL).
“Google is executing at an exceptional level with strong AI-driven momentum, remaining the safe harbor and multi-year compounder within the internet space.
We expect solid Search and Cloud results in 1Q, aided by AI expanding both TAMs, along with additional color on AI product progress during the earning call.
YouTube results may be mixed but are unlikely to materially impact the overall outcome. We also do not expect CapEx guidance to change this cycle, and await commentary on any OpEx savings.
That said, this “safe harbor” continue to be crowded, with valuation seems full esp. relative to mega-cap peers.
The competition landscape could once again pivot back to OpenAI and Meta-driven search wars.
We remain Market-Perform at $345. We value Alphabet using a 50/50 combination of 2027e EV/ EBIT multiple of 25x and a DCF using a WACC of 10% and a terminal growth of 3.5%.
We take up Google Search Cloud estimates, and modestly take down YouTube ad estimates.
We consider Alphabet primarily a digital advertising business and benchmark valuation to comparable peers in this industry set.”
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