Deutsche Bank Raises Price Target on Alphabet

Price hike due to faster revenue growth; Pixel phone sales.

On Thursday, analysts on Deutsche Bank raised their price target on Alphabet (GOOG), the parent company of Google, from $1,400 to $1,475. The bank cited the company’s strong earnings in the most recent quarter, as well as the improved revenue growth on Google Sites as an immediate catalyst.

With shares currently around $1,170, the new price target implies a 26 percent upside for shares in the coming year. On average, analysts rank Alphabet as an Outperform.

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  • Deutsche Bank also sees the company’s product pipeline and revenue growth for its Pixel phone as another potential catalyst to move shares higher.

    Action to take: We like Google as an investment—the company dominates the internet search space and has tremendous earnings power.

    The company’s continued double-digit annual revenue growth more than justifies its valuation near 21 times forward earnings, and the company’s cash exceeds its total debt—exactly the kind of wealth-building company we want to add to during adverse market conditions.

    With a 52-week high near $1,300 per share, we don’t see shares as too pricey here, even if most investors can only buy a handful. Speculators may want to consider the January 2021 $1,400 calls, trading around $67, or $6,700 per contract… that’s the least expensive way to have control over 100 shares and profit from the upside.


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