Morgan Stanley's Cautious Outlook on Alphabet Stock Price

On February 7, 2025, Morgan Stanley announced that it has lowered its target price for Alphabet Inc. (NASDAQ: GOOGL) from $215.00 to $210.00 in a recent research note. Despite this reduction, the brokerage maintains an "overweight" rating on the stock, suggesting that they still see potential in the company's performance moving forward. The new target price reflects a possible upside of 9.60% from Alphabet's current trading price.

Other analysts have also expressed mixed views on the stock recently. For instance, KeyCorp raised its target price for Alphabet from $215.00 to $225.00 and reaffirmed an "overweight" rating on January 10. Similarly, BMO Capital Markets has reissued its "outperform" rating, increasing its price target to $217.00 from $215.00. On October 30, the Royal Bank of Canada and Evercore ISI also adjusted their price objectives upward, from $204.00 to $210.00 and from $200.00 to $205.00, respectively. In the latest report, Robert W. Baird also confirmed its "outperform" rating at a price objective of $205.00.

Overall, analysts are divided, with ten rating the stock as a hold, twenty-nine presenting a buy rating, and four assigning a strong buy rating. According to data from MarketBeat, the current consensus rating indicates a "Moderate Buy" with an average target price set at $210.62.

Current Stock Performance

Alphabet's stock opened at $191.60 on Wednesday, reflecting a 0.1% increase. The company shows solid financial stability with a debt-to-equity ratio of 0.04 and a current ratio of 1.95. Its market capitalization stands at $2.35 trillion, with a price-to-earnings (P/E) ratio of 25.41 and a PEG ratio of 1.31. The stock has seen a 1-year low of $130.66 and a high of $207.05.

The latest earnings results, announced on February 4, indicate that Alphabet reported earnings per share (EPS) of $2.15, surpassing the expected EPS of $2.12 by $0.03. The company's return on equity is a healthy 31.66%, while its net margin stands at 27.74%. Analysts predict that Alphabet will record an EPS of 8.02 in the current year.

Insider Activity and Institutional Investments

In related news, CEO Sundar Pichai sold 22,500 shares of Alphabet stock on November 20 at an average price of $176.67, amounting to nearly $3.98 million. Despite this sale, he retains ownership of over 2 million shares valued at approximately $364.26 million. Likewise, CAO Amie Thuener O’Toole sold 1,367 shares on December 2, indicating a decrease in her holdings of about 5.49%.

Institutional interest in Alphabet is considerable, as seen in recent hedge fund activities. Several large investors have modified their positions in the company, with Maverick Capital, Matrix Private Capital Group, Makena Capital Management, and others increasing their stakes significantly over the past quarter. Currently, approximately 40.03% of Alphabet's stock is held by institutional investors and hedge funds.

Summary of Alphabet's Business Model

Alphabet Inc. operates through multiple segments including Google Services, Google Cloud, and Other Bets, offering a wide array of products from search engine services to cloud computing solutions and hardware.

MorganStanley, Alphabet, Stock