Analyst Doug Anmuth affirmed his overweight rating on the Mountain View, Calif., parent of Google.
“We remain positive on Alphabet, as we believe it is well positioned across ads, clouds, and a number of other key initiatives to both drive and benefit from long-term digital trends,” Anmuth wrote.
“And it has an attractive combination of top-line scale, growth and margins, supporting our view that valuation remains attractive at 27 times our 2022 estimated Alphabet GAAP earnings per share, or 22 times our 2022 estimated GAAP earnings per share excluding cash and other bets.”
Google shares recently traded at $2,275, down 0.3%.
Posting a 30% increase year to date, compared with 11% for the S&P 500, Alphabet's share performance "both absolute and relative to the S&P 500 hasn't been this strong since 2009,” Anmuth said.
“Still, GOOGL remains one of our best ideas as we remain positive on improving top and bottom line trajectory and potential for bigger capital returns. … Our [sum of the parts] valuation suggests a market capitalization approaching $2 trillion, or $2,857 per share, 25% above where [the] shares currently trade.”
Earlier this month, Alphabet won a key legal case: The Supreme Court, overturning a federal appeals court decision, ruled in its favor in a copyright dispute with fellow tech giant Oracle (ORCL) - Get Report.
In March Alphabet was upgraded to buy from hold at Stifel with a higher price target.