Alphabet dips as Wall Street cuts PTs on tech giant following mixed Q1
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Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) shares dipped on Wednesday after it posted first-quarter results that missed estimates, due in part to a weaker advertising market and slowdown in YouTube, leading to several Wall Street analysts cutting price targets.
Deutsche Bank analyst Benjamin Black rates Alphabet (GOOG) (GOOGL) shares "buy," but lowered the price target to $2,900 from $3,150, though he noted that there were a "number of positives" in the quarter, including Google Search revenue and operating margins.
The slowdown in YouTube ad revenue may give investors some pause, but engagement with its TikTok competitor, Shorts, is surging, Black explained.
"On the positive side, Shorts engagement is up 4x [year-over-year] and overall time spend on YouTube continues to grow despite broader reopening," Black wrote in a note to clients.
Alphabet (GOOG) (GOOGL) shares dipped more than 4% to $2,289 in premarket trading on Wednesday.
On Tuesday, Alphabet said it earned $24.62 per share on $68.01 billion in sales during the first-quarter, compared to expectations of $25.76 in earnings per share and $68.15 billion in revenue.
Raymond James analyst Aaron Kessler, who also cut the price target on Alphabet (GOOG) (GOOGL), going to $3,180 per share, down from $3,630, noted several positives that it has in its future. These include "solid" long-term advertising revenue growth in its future, an increase in the momentum of its cloud computing unit, option value in other areas and an "attractive valuation."
Truist analyst Youssef Squali lowered the price target on Alphabet (GOOG) (GOOGL) shares to $3,500, down from $3,600-per-share, but said the company still "retains a preeminent position as the engine of the global digital economy," even in light of the mixed quarter.
In addition to reporting mixed first-quarter results, Alphabet (GOOG) (GOOGL) said it would raise its buyback program to $70 billion and would continue to invest in YouTube, boosting monetization for Shorts.