While the market has surely cooled off over the past six weeks from the blistering pace set in January and February, stocks are still trading close to all-time highs, and that means one thing for companies posting first-quarter results. Meet or beat expectations, and provide at least decent guidance, or sellers may show up in droves.
A new research report from the internet and e-commerce team at Merrill Lynch offers their earnings estimates for 25 top large and small cap companies in the firm’s research universe. They are above Wall Street estimates on 16 of the 25. We screened for the big liquid stocks, and found five that look solid for aggressive growth accounts. All are rated Buy at Merrill Lynch.
The search giant continues to expand and is even working on a driverless car now. Alphabet Inc. (NASDAQ: GOOGL) is a global technology company focused around key areas, such as search, advertising, operating systems and platforms, enterprise and hardware products. It generates revenue primarily by delivering online advertising and by selling apps and contents on Google Play, as well as hardware products. The company provides its products and services in more than 100 languages and in 190 countries, regions and territories.
Alphabet offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.
The Google segment also sells hardware products: Chromecast, Chromebooks and Nexus. The Other Bets segment includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X and other initiatives.
The analysts point to Google Cloud, which is the largest cloud infrastructure and engages in more technology, infrastructure research and development in headcount and dollars than any other company. That gives it the strength and wherewithal to compete with and differentiate itself from Amazon’s AWS and Microsoft’s Azure.
The Merrill Lynch price target for the stock is $1,025, and the Wall Street consensus price objective is $965.81. The shares closed Thursday at $845.09.
This online travel leader is poised for a potential big first quarter. Expedia Inc. (NASDAQ: EXPE) is the leading internet travel pure-play with exposure to online travel in the United States, Europe and Asia. The company’s portfolio of brands includes Expedia, Orbitz, HomeAway, Travelocity, Hotels.com, Trivago, Egencia, Hotwire, Wotif, Venere and Classic Vacations.
Top analysts see it as a story of improving execution, and they also think that the company is starting to finally match Priceline’s growth metrics. The company has raised its dividend and is buying back stock, both shareholder friendly actions.
Expedia investors receive a 0.9% dividend. Merrill Lynch has a $146 target price. The consensus target is $142.72, and shares closed Thursday at $125.67.