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Parent company of Google, the seemingly eternal leader in Internet search alphabet (NASDAQ:GOOG)(NASDAQ:Google) has made millions of investors rich over its 25-year history. But it hasn’t been the most exciting stock of late, with prices surging and crashing wildly on volatility in the tech sector.
Some believe it has been unfairly ignored by the market, and that the market is missing out on an opportunity to get a cheap, solid investment. Take a look at one analyst’s bullish view on the company.
undervalued and undervalued
As February draws to a close, Redburn Atlantic’s James Caldwell raised his price target for Alphabet’s Class A voting stock (stocks with the GOOGL ticker symbol). He says these should be worth him $170 a piece, up from his previous level of $165. In making the change, Caldwell maintained his buy rating on the stock.
Given that they have recently been hovering around the $130 level and are essentially trading at the same level, this means that both classes of Alphabet stock have the potential to rise by about 30%.
Caldwell feels Alphabet’s stock is more like a traditional blue-chip stock in an unexciting industry than a dominant leader in a corner of the technology sector. “Alphabet’s forward P/E ratio is now roughly in line with the US’s forward P/E ratio,” he wrote in a note. [S&P 500 index] Sentiment is clearly negative regarding Google Search’s competitive position and potential for continued growth. ”
Is it obvious?
It can be difficult for companies that have established themselves in a niche field to win the love of investors.
The longer a business lasts, the more people take it for granted and forget that it still has the potential for strong growth. As technology advances, Internet search will become more valuable, not less. And there is no meaningful competition from the powerhouse that is Alphabet. So Caldwell’s latest take on the stock is pretty convincing, and $130 looks like a cheap price for a company with a bright future.
Should you invest $1,000 in Alphabet right now?
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Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any stocks mentioned. The Motley Fool has a position in and recommends Alphabet. The Motley Fool has a disclosure policy.
1 Wall Street analysts think Alphabet stock will reach $170. Can I buy it for around $130?Originally published by The Motley Fool
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