Alphabet Downgraded, Target Cut To $700: Wedbush Fears 'The Four Horsemen Of The Search Apocalypse'
Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) traded down about 1 percent (or $7.20 per share) in Tuesday’s after-hours session, after Wedbush downgraded the stock from Neutral to Underperform, trimming their 12-month price target from $800 to $700.
According to analysts James Dix and Aria Ertefaie, the main concern is the relatively prompt arrival of the “Four Horsemen of the Search Apocalypse... self-identified consumers, consumer control of IP-delivered ads, payments innovation, and attention markets.”
Related Link: Tougher Comps For Alphabet Could Be Offset By New Google Ad Initiatives
Other sources of apprehension include Google’s recent mobile search ad changes, which have the effect of pushing traffic toward paid (better monetized) searches. This could be a detriment to organic searches, which have been declining dramatically.
While this may sound good at first, it can result in a disequilibrium in the monetization of these users, “as advertisers balance search ad cost shocks against ROI—and a smaller search moat vs. competitors.”
The analysts pointed out there are plenty of candidates interested in investing in paid attention, including the highly popular ad blockers and payment platforms that would pay users to view ads.
Shares of GOOGL traded recently at $804 after closing the regular session at $810.73.
Latest Ratings for GOOGL
Sep 2016 | Wedbush | Downgrades | Neutral | Underperform |
Jul 2016 | Citigroup | Maintains | Buy | |
Jul 2016 | CLSA | Maintains | Buy |
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