Citi maintains a "Buy" rating on Alphabet Inc. (GOOGL), setting a price target of $232, based on a valuation of ~22.5x the projected GAAP EPS of $10.31 for 2026. This comes in light of Alphabet's recent submission of its Proposed Final Judgement (PFJ) in response to a court ruling on its search distribution practices, which were found to violate the Sherman Act. Google's PFJ suggests more flexible browser agreements and a three-year term for changes, contrasting with the DOJ's broader ten-year proposal. Google plans to appeal the ruling by late summer 2025.
Citi highlights Alphabet's continued focus on innovation, citing the launches of Gemini 2, Veo, and Imagen 3 as evidence of its commitment to growth despite regulatory challenges. "We believe recent launches underscore a continued focus on innovation even as profitability improves," notes Citi. The report also acknowledges the regulatory overhang on shares but remains optimistic about Alphabet's position in the internet sector.
Alphabet's current stock price is $194.90, down 0.3% from the previous close.