Sundar Pichai, CEO of Alphabet, at the Google I/O developer conference in Mountain View, California on May 10, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet Shares soared 10% on Friday after the company reported better-than-expected first-quarter results and green-lighted its first-ever dividend and a $70 billion buyback.
The company reported revenue of $80.54 billion on Thursday, an increase of 15% from the previous year and the fastest growth rate since the start of 2022, surpassing $78.59 billion. dollars in sales expected by analysts surveyed by LSEG. Earnings per share of $1.89 eclipsed the $1.51 earnings per share Wall Street expected.
Alphabet announced that its board of directors had authorized a dividend of 20 cents per share to be paid on June 17 to all shareholders of record as of June 10, and announced plans to pay future quarterly cash dividends. The company said the board also approved $70 billion worth of additional stock buybacks.
The company beat analysts’ expectations for ad revenue on YouTube and Google Cloud.
Analysts at Barclays maintained an overweight on Alphabet stock and raised their price target from $173 to $200, praising the company’s balance of investment, efficiency and return on capital.
“Google is poised to accelerate growth, increase margins while shipping products faster and returning capital, essentially proving the naysayers wrong,” they wrote in a note on Thursday. “Momentum should stay strong here for a while.”
Oppenheimer analysts took note of Alphabet’s accelerating advertising business despite its substantial spending on artificial intelligence, raising their price target to $205 from $185 and reiterating an outperform rating.
Analysts at Morgan Stanley, maintaining their overweight on Alphabet, raised their price target from $165 to $195, citing the sustainability of the company’s growth and “early successes in sustainable cost base reengineering.”
Among other price target increases for the stock following Alphabet’s earnings, JPMorgan raised its price target from $165 to $200, while Evercore ISI raised its target from $160 to $200 $.
— CNBC’s Michael Bloom contributed to this report.
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