Top BofA Analyst Predicts Significant Alphabet Stock Rise Ahead of Earnings Report
Alphabet Inc. (GOOGL) is poised to announce its third-quarter earnings on October 29. Ahead of this release, Justin Post, a prominent analyst at BofA Securities, increased his price target for the stock from $252 to $280, maintaining a Buy rating. This adjustment indicates an anticipated 11% growth from the current stock price.
Analyst Forecasts and Performance Metrics
Justin Post ranks impressively, sitting at 32 out of over 10,000 analysts monitored by TipRanks. He boasts a 69% success rate, with an average return of 24% across his ratings over the past year.
Revenue and Earnings Projections
For the third quarter, Post has adjusted his revenue estimate to $86 billion, slightly surpassing the Wall Street consensus of $85 billion. He projects earnings per share (EPS) will reach $2.17, marginally below market expectations. This estimate accounts for approximately $3.9 billion in legal expenses. Without these costs, he expects operating margins to remain robust near 35.7%, reflecting effective cost management.
Growth Drivers for Alphabet
- Ad Revenue: Post believes the strength of Alphabet’s core advertising business is notable, with improved spending trends across essential categories.
- Search Performance: He anticipates continued robust performance in search, with stable growth in paid clicks, suggesting that AI advancements are not adversely impacting revenue.
- Cloud and AI Initiatives: Post is optimistic about Google Cloud’s potential, citing recent customer acquisitions that could enhance its service backlog. Additionally, he expects management to discuss the growth of Gemini, Alphabet’s key AI model.
Market Outlook for Alphabet Stock
Overall, Alphabet stock enjoys a consensus “Strong Buy” rating among 38 analysts on Wall Street. This recommendation comes from 30 Buy ratings and eight Hold ratings issued in the past three months. The average price target for GOOGL stands at $258.81, indicating a potential upside of 2.18% from current levels.
As investors prepare for the upcoming earnings report, they will be keenly observing Alphabet’s performance metrics and growth forecasts, particularly in the advertising and cloud sectors.
