Analyst Coverage Change
The financial services firm Raymond James(Rank#3)has maintained its rating for the stock of Alphabet Inc with a “Outperform.” This rating suggests that the firm believes the stock will perform better than the average stock in the market. Additionally, Raymond James has adjusted their target price for the stock, from USD 120 to USD 116. Target price is the projected price level of a financial security stated by an investment analyst or advisor. This could imply that Raymond James has lower expectations for the stock price of Alphabet Inc Class C in the future.
Recent Ratings
- Sanford Bernstein, set a target price of USD 120 for the stock on January 12, 2023.
- UBS Securities also set a target price of USD 115 on the same stock on January 12, 2023.
- Cowen, maintained its position of “Outperform” on the stock. Cowen also lowered its target price from USD 135 to USD 125.
Alphabet’s Stock Forecast & Analysis
The average target price for Alphabet Inc Class C stock over the next 12 months is USD 132.12, with a strong buy rating from analysts. Stock Target Advisor’s analysis of the stock is slightly bullish, with more positive signals than negative. The stock’s current price is USD 101.21 and has increased by 9.06% in the past week, 12.69% in the past month, but decreased by 22.20% over the past year.
Fundamental Analysis (FA)
Positive Fundamentals
- High market capitalization: The company is one of the largest entities in its sector and is among the top quartile. This suggests that the company is relatively stable, as larger companies tend to be more established and have a more diversified revenue stream.
- Superior risk-adjusted returns: The stock has performed well on a risk-adjusted basis compared to its peers in the sector over a hold period of at least 12 months. This means that the stock has provided a relatively high level of return for the level of risk taken on.
- Low volatility: The stock’s annual returns have been stable and consistent compared to its sector peers over a hold period of at least 12 months, and it is in the top quartile. This suggests that the stock is relatively less risky, but it also means that the return may be lower than those of more volatile stocks.
- Superior return on equity: The company management has delivered a better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile. This suggests that the management is effectively utilizing the company’s assets and generating profits for shareholders.
- Superior capital utilization: The company management has delivered a better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile. This suggests that the management is effectively utilizing the company’s capital, and generating a high return on investment.
- Superior return on assets: The company management has delivered a better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile. This suggests that the management is effectively utilizing the company’s assets and generating profits for shareholders.
- Positive cash flow: The company had positive total cash flow in the most recent four quarters. This suggests that the company has enough cash to meet its short-term obligations and reinvest in the business.
- Positive free cash flow: The company had positive total free cash flow in the most recent four quarters. This suggests that the company has enough cash to meet its short-term obligations and reinvest in the business after accounting for capital expenditures.
- Superior Earnings Growth: This stock has shown top quartile earnings growth in the previous 5 years compared to its sector. This suggest that the company has been growing their earning at a better rate than their peers.
Negative Fundamentals
- Overpriced compared to earnings: The stock is trading high compared to its peers on a price to earning basis and is above the sector median. This suggests that the stock may be overvalued in relation to its earnings, meaning that investors are paying more for each dollar of earnings the company generates.
- Overpriced compared to book value: The stock is trading high compared to its peers median on a price to book value basis. This suggests that the stock may be overvalued in relation to the company’s assets and liabilities, meaning that investors are paying more for each dollar of book value the company holds.
- Overpriced on cashflow basis: The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. This suggests that the stock may be overvalued in relation to the company’s cash flow, meaning that investors are paying more for each dollar of cash flow the company generates.
- Overpriced on free cash flow basis: The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. This suggests that the stock may be overvalued in relation to the company’s free cash flow, meaning that investors are paying more for each dollar of free cash flow the company generates after accounting for capital expenditures.
The FA score of Alphabet’s stock is set as “Slightly Bullish” with a score of 6.9 out of 10, where 10 very bullish.
