Alphabet (GOOGL) PT Lowered to $209 at UBS

UBS analyst Stephen Ju lowered the price target on Alphabet (NASDAQ: GOOGL) to $209.00 (from $211.00) while maintaining a Neutral rating.

The analyst said, "We believe the ROIC debate will take center stage once again as Google offered CapEx guidance of $75B for 2025, some $15B ahead of investor expectations. As our 2025 revenue forecast is essentially unchanged vs pre-4Q24, investors will be asking what new products will be emerging to warrant the higher level of investment. Given in-line Search results coupled with a warning of tougher financial services (largely insurance related) ad spend comps for 2025 alongside a shortfall on GCP due to supply constraints, we at least have a partial answer of where the incremental CapEx will head. With that in mind, it is still unclear to us whether Google will be able to extract increased monetization from AI Overviews (vs current SERP) or how quickly supply constraints in GCP will be alleviated, so for the time being we alongside investors will need to wait for sharper product development/release signals to materialize. The higher CapEx for now amounts to about a 1% decrease to our 2026E EPS, and our price target as a result decreases by $2 to $209 (vs prior $211). Looking out, we maintain our Neutral rating as we continue to believe that Google's P/E trading multiple will remain under pressure due to unresolved regulatory issues and prospects for market share loss in its most important franchise."

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