BMO Capital Raises Alphabet (GOOGL) Top Line Estimates on Cloud Strength

BMO Capital analyst Daniel Salmon reiterated an Outperform rating and $3,300.00 price target on Alphabet (NASDAQ: GOOGL) while tweaking the model to reflect:

1) Lower YouTube advertising estimates to better reflect quarterly comps and owing to heightened threat of competition from TikTok.
2) Higher cloud revenue estimates to reflect stronger post-pandemic growth, however operating income estimates for 2022 and 2023 are lower due to continued reinvestment
3) Adjusted interest expense and interest income downward to adjust for a modeling error

The analyst stated "There is no change to our $3300 target, as estimate changes wereimmaterial; moreover, a higher risk free rate and equity risk premium in our DCF waslargely offset by rolling valuation to 2023 for our comparable multiple analyses. $3300implies 14.7x 2023E EV/adjusted EBITDA and 25.6x 2023E P/E, which is roughly in-linewith its mega-cap peer group mean of 13.8x 2023E EV/adjusted EBITDA and 24.8x 2023EP/E."

For an analyst ratings summary and ratings history on Alphabet click here. For more ratings news on Alphabet click here.

Shares of Alphabet closed at $2560.80 yesterday.

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