"Coherent and Robust": Here's What Wall Street Says About Alphabet Gains (GOOGL)

Greg Sandoval / Business Insider

The parent company of Google Alphabet crushed Monday earnings estimates of Wall Street despite a hefty fine from the Union's competition regulator European. The shares are expected to reach a historic high up about 5% from the opening bell on Tuesday

while the $ 5 billion penalty has had a short-term impact on net income. At the same time last year, Wall Street badysts believe that it is simply a slowdown in the long-term trajectory of the company. According to data compiled by Bloomberg, their average price target is currently $ 1,340, up from $ 1,259 last week.

Business Insider has collected badyst notes from six major research firms. Quarterly Results:

Goldman Sachs

Price Target: $ 1,450 (from $ 1,350)

"Unlike the last quarter, we expect this quarter to affect almost all sectors, namely Google's business figure is slightly accelerated with the help of the cloud and hardware, "said Heather Bellini, Analyst of

" Strong growth in combined traffic with total spend TAC growth was 36% in 1Q18 and 26% to 26% in Q1, compared with 61% in Q1 at 47%, which led to an outperformance of EBIT for the first time in 3 quarters. "

Credit Suisse

Price Pricing get: $ 1,375 (from $ 1,300)

" Google has recorded a high quality quarter where most of the outperformance compared to CS came from websites (force pe Resistant to Mobile Search, YouTube and "Network Revenue Tracking (AdMob and Programmatic)," Stephen Ju badyst.

"The hardware contributed less this quarter to its L & O business, with Cloud & Play cited as lines with stronger dollar growth. As we have already mentioned, we are pleased to support Google's investments, as this should enable the company to support a growth of its business by more than 20%, neutral in the long run .

RBC Capital Markets

Price Target: $ 1,400 (from $ 1,285)

"Overall, fundamentals remain very consistent and robust – unprecedented 34 consecutive quarters of 23% Y / Y growth. While GAAP operating margin of 24% is below the three-year average of 26%, badyst Mark Mahaney said:

"There was a debate about the sustainability of the Internet business We call the debate ridiculous The net advertising revenue business turnover grew by 23% on average for 34 quarters (in cash) and shows no signs of slowing down, despite a $ 120 billion turnover, and we would say that Google still accounts for no more than 10% of global advertising spend. in the Cloud, houses connected to the Internet and aut Onomes have potentially enabled the company to benefit from more years of growth in its premiums and profits. There is a regulatory risk, but we have not yet found any evidence that the regulations will have a negative impact on Google's usefulness to consumers or advertisers.

Jefferies

Target Price: $ 1,450 (from $ 1,360)

"The results of Q2 were similar to Q1 – positively (at l3). EC exception): strong top line, well controlled OpEx q / q although the margin is still compressed y / y, and capex high.Basic research remains strong (driven by mobile trends), and we continue to see a significant potential of 4 options to buy (YouTube, Cloud, Hardware, Waymo), which should help generate the $ 100 billion.

"Other notable highlights: 1) Waymo spent 8M miles autonomous driving tests on public roads. The pace accelerates: it took only ~ 1 month to add the last million miles, compared with 2 months of 6 million to 7 million miles and 16 months of 1 million to 2 million miles. Still on track to launch a commercial pilot program in Phoenix by the end of the year. 2) Paid clicks on Google properties grew 58% year-over-year, after 59% in the first quarter, and against the toughest of the year (+ 61% in 2Q17).

Nomura Instinet

Objective Price: $ 1,400 (unchanged)

"The company emphasized the strength of the Asia-Pacific region as a particularly strong geography ( + 34% a / a ex-FX) on the top line and net profit The network traffic acquisition costs (TACs) moderated as a percentage of the network's business turnover because the mix within programmatic activity has been more favorable this quarter (programmatic as a whole is generally a drag on margins), "says badyst Mark Kelley.

"Apart from advertising activities, Cloud continues to be a focal point of the Alphabet business portfolio, both in terms of investment spending and hiring. Management commented that we believe we could be at an inflection point for cloud growth, and that the opportunity would develop at a rate that would likely allow many competitors to succeed. had few comments on the General Regulation on Data Protection (GDPR) and the EC's Android fine, citing a recent implementation. "

GBH Insights

Objective: ] $ 1,300 (unchanged)

" The Street was eagerly awaiting the results of Alphabet after the bell, while the company had another" prove me "quarter on the front advertising with flagship results largely beating expectations. That the EU fine was not in the street figures on an apple apples basis, Alphabet delivered better than expected figures, said badyst Daniel Ives. We believe that the revenue from 2Q's advertising and "bread and butter" research was healthy and a good barometer of potential strength for the remainder of 2018/2019. YouTube's advertising revenue continues to be a "jewel in the crown" for the company and a significant downwind in the next 12 to 18 months. "

Now read: