Alphabet: Sticking With $1,700 Target
Alphabet has dipped $400 on COVID-19 fears.
The company has an EV down to only $670 billion due to $115 billion in net cash.
A slash in travel ad revenues will cut $1-2 billion in quarterly revenues.
The stock only trades at an EV of 12.2x '21 EPS targets. A $1,700 target is only 19.0x EPS targets.
With analysts already warning on Alphabet (GOOG, GOOGL) losing ad revenue in the travel space, the stock has taken an amazing $400 hit from recent highs. While consumers Internet search usage may remain high, hotels and travel destinations aren't going to advertise on the platform with a lack of travelers. While the situation sounds dire in the short term, investors should buy the stock for the all but certain rebound in the digital ad space as the coronavirus fears dissipate in the next weeks or months. My investment thesis maintains a $1,700 price target on the stock based on no changes to 2021 estimates.
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