2017-03-28 18:55:24 | Barclays initiates key Internet names, sets $1,120 target on AmazonBarclays initiated coverage of multiple Internet stocks Tuesday, recommending investors steer clear of Twitter (TWTR) but snap up Amazon (SNAP) as it potentially heads to the research firm's $1,120 target price. BARCLAYS BUY RATINGS: Starting coverage of no less than 16 names across Internet, mobile, and e-commerce Tuesday, Barclays analyst Ross Sandler and team issued Overweight ratings on Amazon, eBay (EBAY), Alibaba (BABA), Facebook (FB), Godaddy (GDDY), Alphabet (GOOG), Mercadolibre (MELI), Weibo (WB), Wix.Com (WIX) and Tencent (TCEHY). On Amazon, for which Sandler sets a $1,120 price target on a break-up analysis of its cloud and retail operations, the analyst asks whether the company could be the first to reach $1T in market cap. Amazon is "arguably the best story in the space, with the most open-ended growth opportunity and most highly functional organization," he writes, cautioning that the stock is arguably over-owned and could see volatility in 2017 as expectations "likely come down," though he recommends consistently add to positions. Turning to Facebook and Alphabet, the analyst says the former is "arguably the top consensus long in the group" and should deliver "another decade of strong fundamentals," while the latter looks set to "continue to grind up slowly as it has over 2016." NEUTRAL AND SELL RECOMMENDATIONS: Making the case for his Equal Weight recommendations Tuesday, which include Baidu (BIDU), Shopify (SHOP), Web.com (WEB) and Snap (SNAP), Sandler says he's "bullish" on the Snapchat parent's growth trajectory but warns of the post-IPO "rough patches" historically faced by new Internet companies. Finally, the analyst's Underweight initiations include Groupon (GRPN) and Twitter (TWTR). Explaining his thesis on the microblogging platform, Sandler says the Twitter call is "based on sector underperformance rather than some structural problem that investors aren't already aware of," adding that his checks suggest fundamentals will "likely get a little worse" in 1H17 before improving in the second half. The analyst sets a $14 price target on the shares. PRICE ACTION: Shares of Amazon are up fractionally in after-hours trading, while Twitter and Groupon are down a respective 0.20% and 2.78%. | |
---|