Technology

SunTrust Says Buy Large Cap Internet Stocks Before Q3 Results

Alibaba has gone beyond e-commerce and developed into a sophisticated new type of conglomerate in the cyber-era with e-commerce as the base for the rest of the four businesses: logistics, finance, data-computing and cross-border infrastructure. Top analysts expect a whopping 24% compounded annual growth rate between now and 2018 for e-commerce in China.

The $205 SunTrust price target is less than the $220.98 consensus target. Shares closed Friday at $142.93.

Facebook

The huge social media leader has been incredibly volatile since posting absolutely horrible quarterly results. Facebook Inc. (NASDAQ: FB) is the largest social network with over 2.0 billion monthly active users and over 1.4 billion daily active users. The company generates revenue from advertising and from payments, with over 95% of revenue from advertising. It generates close to 50% of revenues in the United States and Canada and is expanding rapidly in international markets.

Its solutions also include Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application for mobile and web on various platforms and devices, which enable people to reach others instantly, as well as enable businesses to engage with customers; and WhatsApp Messenger, a mobile messaging application.

Despite terrible earnings results last quarter and metrics, which caused the shares to sell off a stunning 20%, Facebook is used by some 60% of small businesses, which utilize the company’s advertising platform in some way for their businesses. The ability to grow that number is a huge positive for the beleaguered social media giant.

In addition, marketing data suggests that despite the negative headlines around data privacy, slowing engagement and shift to Stories, Facebook advertising return-on-investment remains strong, and the platform’s targeting capabilities and reach remain the best in class.

SunTrust has set its price target at $200. The consensus target is $207.89, and shares ended the week at $154.05.

Bookings

This internet travel leader was once called the Priceline Group, and now it is known as Bookings Holdings Inc. (NASDAQ: BKNG). The online travel business offers price disclosed and opaque airline tickets, hotel rooms, rental cars, vacation packages and cruises.

The company generates over 85% of gross profit from its International brands. It operates Priceline.com, Booking.com, Kayak.com, Agoda.com, Rentalcars.com and OpenTable.

SunTrust’s price objective of $2,270 compares with a $2,187.84 consensus estimate and the most recent close at $1,805.74.

Expedia

This is online travel leader is poised for a potentially big 2019. 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 the dividend and is buying back stock, and both are shareholder friendly actions. In addition, Expedia posted huge second-quarter results that blew past Wall Street expectations.

Expedia investors receive a 0.9% dividend. The SunTrust target price is $180. The consensus target is $150.07, and shares were last seen at $118.32.

Despite the recent volatility, especially associated with Facebook, social media and the popularity of the internet isn’t going anywhere, and while recent issues like privacy need to be addressed and resolved, you can bet that investors will continue to buy the group’s large-cap leaders.

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