RBC Raises Alphabet Price Target to $1,500

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  • Bank sees opportunity from monetizing Google Map app.

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  • Royal Bank of Canada (RBC) reaffirmed its outperform rating on Alphabet, parent company of Google (GOOG). The bank raised its price target on shares from $1,425 to an even $1,500.

    With shares of the search engine giant around $1,240, the new prices target represents an upside potential of 21 percent. Shares have traded as high as $1,289 in the past year, and shares are well off the 52-week low of $970.

    The upgrade on the price target included a note that Google Maps “remains one of the greatest under/un-monetized 1B+ user ‘Net platforms” in tech today, and that properly structured, it could add anywhere from $2 to $3.5 billion in revenue in the next two years.

    Action to take: Shares have never broken over $1,300, so this is one big tech name that’s trading near its all-time highs. And at 23 times earnings, shares are a bit pricey relative to the overall market, but about in-line when factoring in the company’s growth.

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  • Investors looking to buy shares may want to hold out for a pullback into the $1,100 area, which the company has done twice in the past year.

    Speculators may want to consider a January 2021 call option, possibly with a strike price of $1,500. Trading around $75, or $7,500 for the contract, the trader would control 100 shares and a move up to the $1,500 price target would give the trader a fantastic boost.