DA Davidson analyst Gil Luria suggests that a strategic breakup of Alphabet (GOOG, Financial) is necessary to enable investors to focus on the specific segments they are interested in. Rather than isolated spin-offs, a comprehensive separation of the company's divisions is recommended to meet investor preferences. According to DA Davidson, Alphabet may eventually consider a spin-off of its Network and potentially Chrome divisions in response to the Department of Justice, although this could take some time. The firm points out that ongoing discussions around the Search business are unlikely to reach a resolution soon. Maintaining its current conglomerate structure ties all business units to a lower valuation multiple, unlike those seen in companies such as NFLX and TSLA. DA Davidson's analysis values Alphabet at $243 per share post-breakup, with a potential rise to $300 if its independent chip sector starts operating outside the conglomerate. The firm maintains a Neutral rating for Alphabet, setting a price target at $160.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Alphabet Inc (GOOG, Financial) is $201.56 with a high estimate of $225.00 and a low estimate of $185.00. The average target implies an upside of 26.30% from the current price of $159.58. More detailed estimate data can be found on the Alphabet Inc (GOOG) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Alphabet Inc's (GOOG, Financial) average brokerage recommendation is currently 1.6, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Alphabet Inc (GOOG, Financial) in one year is $198.28, suggesting a upside of 24.25% from the current price of $159.58. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Alphabet Inc (GOOG) Summary page.
