Alphabet (GOOGL) shares touched a record on Tuesday after Loop Capital Markets upgraded the advertising, search and technology titan to buy from hold and lifted its price target by a third to $2,525 from $1,895.
Alphabet recently traded at $2,138.26, up 2.1%, after hitting a high of $2,140.60. The stock has jumped 42% over the past six months amid the surge of online activity during the COVID pandemic.
Loop analysts Rob Sanderson and Alan Gould are enthusiastic about Alphabet’s advertising business, which accounts for about 80% of the Mountain View, Calif., company’s revenue.
“Core advertising trends were surprisingly strong across Google properties in each of the past two quarters and we expect momentum will continue,” they wrote in a commentary cited by Bloomberg.
A rebound in travel-related ads should “provide incremental lift by midyear,” they said.
Morningstar analyst Ali Mogharabi puts fair value for Alphabet at $2,605.
“After adjusting our model to reflect higher ad spending and continuing robust growth in cloud, and taking into account the time value of money, our fair value estimate is now 32% higher, at $2,605 per share,” he wrote earlier this month.
“Alphabet remains one of our favorite names in the internet and social-media space.”
Further, “[we] expect continuing growth in the firm’s cash flow, as we remain confident that Google will maintain its leadership in the search market,” Mogharabi said. “We foresee YouTube contributing more to the firm’s top and bottom lines.”