Amazon, Google stock-price targets fall as odds of a recession rise

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Truist analyst Yusuf Squally lowered his price targets and revenue projections on some internet giants, saying they are not immune to the negative effects of a rising US dollar and a slowing economy.

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Squally said that while he believes Inc. AMZN,
and Google-parent Alphabet Inc. GOOGL,

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Well positioned to face the current macroeconomic turmoil and “emerge from it strong”, their results will still be under pressure in the short term.

He lowered Amazon’s stock price target from $180 to $170, and lowered his target on Alphabet stock from $145 to $136. Squally lowered its third-quarter revenue estimate for Amazon by $126.7 billion to $125.0 billion and for Alphabet by $71.2 billion to $70.1 billion.

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“We have updated our projections to reflect increased headwinds from FX, along with a greater likelihood of a mild recession in 2023,” Squally wrote in a note to clients. FX refers to foreign exchange, or currency translation.

read also‘We are in deep trouble’: Billionaire investor Druckenmiller believes the Fed’s monetary tightening will push the economy into recession in 2023.

Meanwhile, he reiterated his buy ratings on Amazon and Alphabet for at least the past three years, saying that with valuations at 10-year lows, the market has already discounted very low outlooks.

Amazon stock is down 29.9% to date and Alphabet shares are down 31.5%, while the S&P 500 index SPX,
22.4% is down.

A rising dollar can hurt the results of multinationals because it reduces the value of revenue and profits earned overseas. and the ICE US Dollar Index DXY,
Which tracks the dollar against a basket of currencies from its largest trading partners, up 18.0% so far, already on track for a record calendar-year gain. It closed at a 20-year high on Tuesday.

read moreMorgan Stanley’s Wilson has warned that a rally in the US dollar is creating a ‘volatile situation’ for the stock market.

Amazon reported $30.72 billion in international sales, or 27.2% of total revenue, during the quarter ended June 30, while Alphabet reported $33.68 billion, or 54.4% of its revenue outside the US.

Squally acquired Meta Platforms Inc. It also cut its stock-price target for Meta.
from $260 to $240 and lowered its third-quarter revenue estimate from $27.6 billion to $26.8 billion, but maintained its buy rating on the social-media giant for at least the past three years.

Snap Ink for Snap,
They put their rating on hold and their price target at $12, but raised their third-quarter revenue estimate from $1.08 billion to $1.14 billion, to reflect “improving trends in digital advertising demand” for the platform. Gave.

Meta derived 60.3% of its revenue from outside the US for the June 30 quarter, while Snap revenue from outside the US totaled 32.4%.

Meta’s stock is down 58.5% this year, while Snap shares are down 77.4%.

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