Alphabet Downgraded To Hold From Buy At Canaccord Genuity

By Caitlin Huston Markets MarketWatch Pulse

Shares of Alphabet Inc were falling 2% Thursday morning after the stock was downgraded to hold from buy at Canaccord Genuity. The analysts expect Alphabet to perform well this year and even achieve a 20% growth level on Google Properties next year. The issue is that they believe Google's recent growth has been driven by ad load increases on mobile search and YouTube, which is not sustainable in the future. Alphabet's gross margin estimates are too high, they say, which curtails the possibility of an increased earnings-per-share outlook. They add that Alphabet's valuation is historically high, which brings it to close to the analyst's price target of $1,000. Shares of Alphabet have gained 8.7% in the past three months, compared to the S&P 500's gain of 1.6%.

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