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Alphabet’s (NASDAQ:GOOGL) price target was cut to $3,000 from $3,200 by Cowen analyst John Blackledge in a note Wednesday.
Blackledge, who has an Outperform rating on the stock, explained that they slightly trimmed their ’22 Search & YouTube ad estimates following its digital ad expert check call, which “suggested Search is seeing healthy demand, while also reflecting historically tough comps.”
“Our expert’s agency runs $1BN+ in US Google Search spend, with client mix skewing to retail/eCommerce (without broad exposure to Travel). The agency saw Google Search +18% y/y in 2Q22, down from +23% y/y growth in 1Q, while the 2 yr. avg growth was +30% in 2Q22 vs. +34% in 1Q22; the agency’s growth was helped by a lack of Travel brands, which are seeing tough y/y comps in 2Q22,” said Blackledge. “We now estimate 2Q22 GOOG Search & Other rev +14.5% y/y (below our expert’s results, and vs our prior +16.0% est), decelerating vs +24.3% in 1Q22. We est. YouTube adv. will decel to +7.5% y/y in 2Q (unchanged vs our prior est), reflecting historically tough y/y comps.”
The analyst also stated that the latest survey again highlighted the potential risk to YouTube mobile viewing share due to the rise of TikTok among younger users.
“Among the A18-24 demo, YouTube led all platforms in 2Q22 when respondents were asked which platform they used ‘most often’ for mobile video, but YouTube dropped to 40% of respondents vs 48% in 2Q21, while Tiktok was #2 with 22%,” explained Blackledge.
