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An attendee demonstrates Meta’s Quest Pro virtual reality headset
Nic Coury/Bloomberg
Jefferies predicts several large tech companies are poised to outperform this year on the back of their cost-cutting initiatives and attractive valuations.
On Monday, internet analyst Brent Thill recommended
Meta Platforms
(ticker:
META
),
Alphabet
(
GOOGLE
), etc
Uber Technologies
(
UBER
) as his favorite stock ideas for 2023. He has Buy ratings on the three companies.
On Monday, Meta stock fell 0.4% to $129.47, while Alphabet and Uber shares traded up by 0.8% to $88.02 and by 3.8% to $27.40, respectively. The
S&P 500
fell by 0.1%.
The analyst reiterated his $155 price target for Meta stock, and $125 forecast for Alphabet stock. He reduced his target for Uber to $38 from $50.
Thill noted Meta is valued at just 16 times 2023 earnings estimates, which is one of the lowest multiples in the sector. He forecasts the company will reduce its expense structure more than expected this year, citing how Meta’s costs historically have come in below the midpoint of annual expense guidance range six out of at least seven years.
For Alphabet, the analyst thinks management will announce big layoffs this year, which will improve its profit margins. He also believes the parent of Google is in a great position to benefit during the eventual recovery. “Ad budgets are the easiest to cut first in a slowing macro, but also the quickest to turn back on,” he wrote.
Finally, Thill estimates Uber’s profitability will rise this year, and for 2024. He projects the company’s revenue will grow about 19% per year through 2025 on the back of ride-hailing and food-delivery growth.
Write to Tae Kim at tae.kim@barrons.com
.