FANG Stocks Get Positive Reviews, Outperform Ratings With New Coverage

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Social media leader Facebook (FB), e-commerce king Amazon (AMZN) and Google-owner Alphabet (GOOGL) all received positive reviews and outperform ratings in new coverage initiated by Evercore ISI.

X Facebook, Amazon and Alphabet are three of the four so-called FANG stocks,  the other being Netflix (NFLX), with all four internet companies being tech titans of our time.

On Facebook, Evercore ISI analyst Anthony DiClemente expects the company to capture the largest share of incremental ad revenue across all global media properties over the next five years. He estimates Facebook’s ad revenue will expand at a 30% compound annual growth rate and exceed $100 billion by 2021. By then, he also expects Facebook to reach 3 billion users.

“Our conclusion is that Facebook shares are likely to outperform all other advertising companies, as it maintains substantial room for absolute user growth globally,” DiClemente wrote in a research note to clients. “We anticipate strong growth in emerging markets,” to be complemented by stable trends in developed economies.

DiClemente set a price target on Facebook of 225, which is a 29% premium from where the stock currently trades.

Facebook, on Nov. 1, reported third-quarter earnings that topped earnings and revenue estimates by a wide margin.

On Amazon, DiClemente set a price target of 1,350, which is a 17% premium from its current price.

“Our bullish outlook is supported by the view that Amazon’s unparalleled logistics infrastructure will allow it to continue to take share of most e-commerce verticals, with grocery and health/personal care being the newest,” DiClemente wrote. “While relative valuation to the rest of FANG may look expensive, Amazon’s strategic positioning to win share in multiple addressable markets should continue to warrant a substantial premium.”

Amazon recently scored two price-target hikes on expectations of a strong holiday sales season and increased optimism about its competitive position.


IBD’S TAKE: Facebook, Amazon and Netflix are currently on IBD’s exclusive list of Leaderboard stocks. There are plenty of places on Investors.com to research and find top stocks, but when you’re looking to get a broader idea, Check out IBD’s Tech Leaders feature.


On Alphabet, DiClemente set a price target of 1,230, a premium of 20%.

“We expect Alphabet to maintain its position as the world’s largest and most successful advertising platform well into the next decade and sustain its established track record of providing attractive returns to shareholders,” he wrote. “Our simple view is that Alphabet provides a compelling combination of market dominance, sustainable growth, disciplined resource allocation, and reasonable valuation.

Alphabet, in late October, reported third-quarter results that smashed estimates, sending shares in the internet giant to a new high.

Shares of Alphabet were up 1.3% to close at 1032.72 on the stock market today. Amazon ticked up 0.9% to finish at 1,152.35. Facebook climbed 1.9%, ending the regular trading day at 176.06. Meanwhile, Netflix was down early but switched gears and was up 0.6% to 185.30.

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