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Needham & Company analysts lowered the price target on Alphabet (NASDAQ:GOOGL) stock to $115 per share from the prior $160.
The lowered price target reflects slashed Q4 and FY23 estimates, incorporating a weaker ad spending outlook in 2023 than Needham’s prior forecasts. Analytics firms, including Zenith, Magna, and GroupM, call for global ad growth ranging from 4.5% to 5.9%. The U.S. market is projected to grow between 3.7% and 5.5%.
Lowered GOOGL estimates at Needham see the internet giant reporting EPS of $1.20 on revenue of $76.5 billion. Analysts are calling for an EPS of $1.20 on revenue of $76.9B.
“Weakness is primarily coming from advertising rev weakness at Search & YouTube. For example, we now estimate that Search will report flat y/ y at $43.5B (3% below our previous est), and that YouTube’s 4Q22 advtg revs will decline 4% y/y (down 6% from our previous estimate). We slightly raised our Cloud estimate to up 34% y/y to $7.4B (1% above previous our est),” the analysts further noted in a memo to clients.
For FY23, they see the Google parent company reporting EPS of $5.21 on revenue of $304.1B.
Alphabet stock price closed at $89.58 yesterday.
