Redburn Atlantic analysts said in a note to clients Friday that Alphabet's (NASDAQ:GOOGL) search resilience is underappreciated. The firm lifted its price target for the stock to $170 from $165, keeping a Buy rating on the stock.
The analysts explained that with Alphabet's forward PE now just in line with that of the S&P, sentiment has clearly turned negative regarding Google Search's competitive position and ongoing growth potential.
However, Redburn believes Search is in a "structurally stronger position than appreciated" and that there should be upside to Search, Cloud and EPS consensus expectations.
"The strength of Google's Search franchise comes partly from the superiority of its technology, but also from the strength of its market position," explained the analysts. "The combination of its ownership of all key entry points to the internet, multiple years of consumer data, unprecedented breadth of advertisers and every website effectively optimising for Google in combination creates a significant barrier for anyone attempting to match Google's capabilities."
Given its belief in the strength of Google's search strength, Redburn remains bullish on GOOGL.