Credit Suisse Slashed Price Targets On Google, Meta Ahead Of Quarterly Earnings

Anusuya Lahiri

Thu, Apr 21, 2022, 2:57 PM2 min read

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Credit Suisse analyst Stephen Ju slashed the price targets on two Big Tech companies ahead of their quarterly earnings.
Ju cut the price target on Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) Google to $3,450 from $3,500 (34.3% upside) and kept an Outperform rating.
Ju maintained Outperform rating based on: 1) ongoing monetization improvements in Search through product-/AI-driven updates, 2) greater-than-expected revenue contribution from non-Search businesses (YouTube, Cloud, and Play), 3) optionality/shareholder value creation from new monetization initiatives such as Maps, Discover tab, as well as the eventual commercialization of Other Bets.
Ju continues to gather advertiser feedback suggesting raised spend allocation across Google properties given lingering IDFA-related headwinds.
While he has otherwise left his FXN growth estimates unchanged, Ju believes Q1 results should exceed consensus once again.
Ju slashed Meta Platforms Inc's (NASDAQ: FB) price target from $336 to $272 (40.5% upside) and maintained an Outperform.
Meta maintained the Outperform based on: the potential for better-than-expected ad revenue growth on product innovation (Facebook Shops, Search in Marketplaces, etc.), conservative Street models underestimating the long-term monetization potential of other billion-user properties like Messenger and WhatsApp, optionality for faster FCF growth on greater efficiency on content screening/security costs.
Near-term checks indicate in-line ad revenue with minor adjustments to the 1Q22 revenue projections.
Ju chose to decrease the ad revenue forecasts for 2023-beyond to contemplate mid-to-high teens nominal dollars of growth every year.
Price Action: GOOG shares traded lower by 2.39% at $2,503..56 on the last check Thursday.

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Credit Suisse Slashed Price Targets On Google, Meta Ahead Of Quarterly Earnings

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