Alphabet Upgraded: Google Parent Better Positioned Than Facebook

Alphabet is better positioned to overcome the economic downturn presented by the coronavirus outbreak than its online-ad-revenue rival Facebook
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Alphabet GOOGL is better positioned to overcome the economic downturn presented by the coronavirus outbreak than its online-ad-revenue rival Facebook  (FB) - Get Report, according to a note from analysts at BMO Capital.

BMO upgraded Alphabet stock to outperform from market perform with a price target of $1,400. The target indicates 26% upside from Alphabet's Friday closing price. 

The Google parent's shares at last check were 0.9% higher at $1,120. 

"To upgrade one of the most consensus `high quality' stocks in the market after a historic selloff should elicit a fair amount of `yeah, so what?'" analyst Daniel Salmon wrote in his note. 

"And GOOGL is only moving slightly, from among our top market performs to still-pretty-far-down our outperform pecking order. (Disney,  (DIS) - Get Report Amazon  (AMZN) - Get Report and Netflix  (NFLX) - Get Report remain on top.)

"But we expect our megacaps to be popular upon rebound, and we think there are important relative fundamental differences that nudge GOOGL into outperform territory, and thus the focus of this note is relative tactical positioning vs. FB and AMZN."

The firm says Alphabet has greater exposure to large businesses, while small businesses will suffer the most from the coronavirus pandemic and the economic recession it has induced. 

While Alphabet is preferred over Facebook, Amazon  (AMZN) - Get Report tops them both in BMO's book. 

 Last week, Alphabet said it would donate $800 million toward producing medical supplies that medical workers need to fight the deadly outbreak, which has claimed more than 2,000 lives in the U.S. 

The company said that it was working with Magid Glove and Safety to produce 2 million to 3 million face masks.