HSBC Raises Alphabet Price Target to $435

HSBC analyst Paul Rossington raised the price target on Alphabet (NASDAQ: GOOGL) to $435.00 (from $385.00) while maintaining a Buy rating.

“Q1 results a 9.2% EBIT beat, EPS distorted by equity gains: Total revenues were +21.8% yoy to USD109.9bn and 2.7% ahead vs VA consensus at USD107.0bn.

Total EBIT was USD39.7bn, +29.7% yoy and 9.2% ahead of consensus at USD36.4bn.

At an EPS level, diluted EPS was +81.8% yoy to USD5.11 and +87.3% ahead of consensus of USD2.73 driven once again by gains in equity securities of USD36.9bn, which we think is likely due to Anthropic and/or SpaceX (both private businesses).

Removing this impact, diluted EPS would have been USD2.76, broadly in-line with consensus… Remain Buy rated with USD435.00 TP (from USD385.00), implying ~18% upside: We update our model for the release, increasing our EBIT expectations for FY25-27e by 4-7% over FY26-28e.

We roll forward our valuation to capture a 12-month forwards EBIT, which drives our higher TP of USD435.00 alongside our higher estimates. Next potential catalyst: Google I/O May 19-20.”

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