Alphabet (GOOGL) PT Raised to $1,800 at Needham & Company

Needham & Company analyst Laura Martin raised the price target on Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) to $1,800.00 (from $1,350.00) while maintaining a Buy rating.

Martin commented, "GOOGL reported mixed 4Q19 results with total revenue of $46.1B (up 17% y/y, 3% below our estimate) and reported EPS of $15.35 (up 20% y/y, 18% above our estimate owing to a 0% tax rate). At GOOGL’s avg 2019 tax rate of 13%, EPS still over-delivered at $13.50. There were several key “firsts” now that Sundar Pichai is CEO: a) GOOGL added new revenue granularity, which we view as a sign that GOOGL may listen more carefully to external constituencies; b) YouTube generated $15mm of advtg in 2019 (up 36% y/y), and $4.7B of ad revs in 4Q19 (up 30% /y/y); c) Cloud revenue was $2.6B (up 53% y/y), and GOOGL’s backlog was $11.4B (“mostly” cloud); d) creating vertical “ecosystems” is a core CEO focus; e) creating super-groups (like in AI, advertising, tech, etc), across silos to drive value from all being owed by GOOGL."

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