Market Overview

Morgan Stanley Lowered Internet Sector View, Warning on Possible Pullbacks

Related GOOG
Rogers Communications Misses on Q2 Earnings and Revenues
Facebook Beats but Lofty Valuation Puts These ETFs on Watch - ETF News And Commentary
Bulls in Charge Despite Geopolitical Tumult (Fox Business)
Related AMZN
Amazon (AMZN), Pandora (P) Disappoint on Q2 Earnings
Amazon Sinks After-Hours, Misses Q2 Bottom-Line Street View
Amazon Shares Down Nearly 10% After 2Q Miss (Fox Business)

In a report published Monday, Morgan Stanley analyst Scott Devitt lowered the Internet industry sector view to In-Line.

Devitt noted that the Outperformance of this sector was driven by multiple expansion over positive estimate revisions. Morgan Stanley commented "We believe that growth needs to accelerate to justify recent performance, the absence of which could lead the group multiple to revert to the mean." The analyst warned investors that trading on strong TAM opportunity can face strong pullbacks.

Devitt maintains the Overweight rating on Google (NASDAQ: GOOG), but removed the company from Morgan Stanley's Best Idea List. The analyst continues to favor larger names with "attractive growth" including Amazon.com Inc. (NASDAQ: AMZN), eBay Inc. (NASDAQ: EBAY), Facebook, Inc. (NASDAQ: FB), LinkedIn Corporation (NYSE: LNKD), priceline.com Incorporated (NASDAQ: PCLN), and Google. Devitt further recommends Groupon, Inc. (NASDAQ: GRPN) and Pandora Media, Inc. (NYSE: P). Morgan Stanley is bearish on companies including Zynga, Inc. (NASDAQ: ZNGA), WebMD Health Corp. (NASDAQ: WBMD), and OpenTable, Inc. (NASDAQ: OPEN).

Posted-In: Morgan Stanley Scott DevittAnalyst Color Analyst Ratings

 

Most Popular

Related Articles (AMZN + EBAY)

Around the Web, We're Loving...

Partner Network

Get Benzinga's News Delivered Free