KeyBanc Capital Markets on Wednesday shared with its clients the firm’s favorite Internet stock picks for this year.
The bank’s Internet analyst Andy Hargreaves said there are still big opportunities in the industry despite recent sector turbulence.
“Despite the hysteria of 2018 and continued maturation of the consumer Internet, we continue to see attractive value in the most scaled players and unique growth or recovery opportunities in smaller players,” he wrote in a report.
Invesco NASDAQ Internet ETF
(PNQI) has declined by nearly 12% since the end of September.
Here are four Overweight-rated companies that made his key Internet ideas list for 2019 and their price targets.
The analyst has a $1,430 price target for class A Alphabet stock, representing about a 33% upside to the current price.
“We view Alphabet as the global leader in collecting, analyzing, and productizing data, which may be the most valuable skill of the Internet era,” he wrote. “The Company retains a dominant position in search and short-form video, both of which continue to grow quickly.”
He predicts Alphabet will grow its sales by 18% in 2019.
He has a $195 price target for Facebook stock, representing about 35% upside to the current level.
“We see the potential for upside to our revenue estimates from investments in content and messaging monetization,” he wrote. “Facebook’s strong history of testing features and shifting consumer behavior suggests that its investment is likely to create incremental revenue and profit opportunities over time.”
Hargreaves forecast 32% revenue growth for Facebook this year.
Hargreaves has a $40 price target for Criteo stock, representing about 62% upside to the current price for shares of the ad-tech firm.
“Criteo’s core re-targeting service remains a differentiated and highly valued marketing tool, in our view, and likely to re-accelerate in 2019,” he wrote.
He predicts 2% sales growth in 2019 for the company.
The analyst has a $26 price target for Cardlytics stock, representing more than 100% upside to the marketing firm’s current share price.
“Recent launch of Chase [banking-awards program] combined with the Wells Fargo launch in 2019 should set CDLX up with plenty of scale to attract new advertisers to the platform,” he wrote. “We believe Cardlytics retains a significant opportunity to drive advertiser adoption of this unique and high value inventory.”
He predicts Cardlytics can grow its sales by 37% in 2019.
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