Alphabet Bulls Stay the Course, Undeterred by Analyst Downgrades
$Alphabet(GOOGL)$
The tech giant's search business is "about to come under siege," and that risk isn't fully reflected in analysts' estimates, Melius Research said Monday as it cut its price target on the stock to $173 from $218, according to a Bloomberg report.
MoffettNathanson also lowered its price target on the stock, citing investor fears that the company's search advertising growth, according to the report. Other analysts including those from Wells Fargo and Jefferies also pared their price target, MT Newswires reported Monday.
The downgrades weren't enough to send the bulls packing. At 3:03:20 p.m. in New York Monday, an active seller collected a $11.5 million premium for writing put options that give the holders the right to sell the 450,000 Alphabet shares at $180 by April 17. That's the biggest among the bullish block option trades posted during the trading day.
That block trade could be profitable for the seller should the stock climb above that $180 strike price before the contract expires in 17 days, rendering the put options worthless. For that to happen, the stock would need to break the downtrend momentum that fueled a slump of more than 25% from its intra-day peak to about $154 Monday.
CFRA analyst Angelo Zino still expects Alphabet’s revenue growth to remain healthy as he maintained his $220 price target on the stock, according to his note dated March 29, two days before his peers lowered theirs.
He also noted that Alphabet is expanding its enterprise cloud services, as he stressed the "tremendous profitability and outstanding operating leverage inherent to the businesses" in the interactive media services sub-industry, which includes the tech giant.
Alphabet and $Meta Platforms, Inc.(META)$
Of the 15 block Alphabet option trades posted so far, seven were bullish and another seven were bearish. The remaining one block trade was neutral.
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