A recent ruling from a U.S. District Judge has determined that Alphabet's (GOOGL) Google has engaged in unlawful monopolistic practices within the publisher advertising server and ad exchanges sectors. The core of this decision targets Google's advertising network, which is projected by Citi to represent 8% of the company's gross revenue by 2025, though it is on a declining trajectory. The advertising network currently contributes 1% to Alphabet's overall EBITDA.
Citi analysts suggest that while the process of implementing remedies and navigating through potential appeals could extend over time, there is a possibility that Google might eventually be compelled to spin off its advertising network. The anticipated divestiture, according to Citi, is unlikely to significantly affect Google's primary search operations and its owned and operated advertising ventures.
Despite the legal challenges, Citi maintains a positive outlook on Alphabet, reiterating a Buy rating with a target price of $195, affirming confidence in the company's resilience and core business strengths.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for Alphabet Inc (GOOG, Financial) is $207.59 with a high estimate of $234.00 and a low estimate of $173.00. The average target implies an upside of 34.85% from the current price of $153.94. More detailed estimate data can be found on the Alphabet Inc (GOOG) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Alphabet Inc's (GOOG, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Alphabet Inc (GOOG, Financial) in one year is $196.02, suggesting a upside of 27.34% from the current price of $153.94. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Alphabet Inc (GOOG) Summary page.
