Benzinga·2025-04-21 19:40Core Viewpoint - BofA Securities analyst Justin Post maintains a Buy rating on Alphabet Inc with a price forecast of $185, despite lowering the 2025 revenue forecast due to tough comparisons and tariff uncertainties [1][2]. Financial Projections - For the first quarter, the analyst projects revenue of $74.1 billion and GAAP EPS of $1.93, which are below the Street's expectations of $75.5 billion and $2.01, with search revenues expected to grow by 7% compared to the Street's 9% [1][2]. - For the second quarter, Post anticipates revenue and GAAP EPS of $76.2 billion and $1.98, respectively, which are also below the Street's estimates of $79.7 billion and $2.15 [3]. Market Sentiment and Competitive Landscape - The Street has been lowering expectations as business sentiment has deteriorated, with a search growth expectation of 7-8% [2]. - There are concerns regarding competitive and regulatory pressures, especially if the company misses expectations, even if due to macroeconomic factors [2][3]. Advertising Spend and Performance - The analyst notes a negative impact on advertising spend due to tariffs and increased competition from AI traffic, leading to elevated outlook uncertainty [3]. - Despite challenges, there are signs of resilience in certain areas, such as eCommerce and cloud services, which may support Google’s search ad spend [4][5]. Stock Valuation - At a stock price of approximately $153, the analyst considers it attractive at 16 times the lower fiscal 2026 GAAP EPS or 10 times the core business [5].