BoA: Google CPCs Feeling Impact Of Forex And YouTube

Bank of America Merrill Lynch recently issued a company report on Alphabet Inc Class C

after the company released 4Q15 earnings of $8.67 and revenue of $17.3 billion which exceeded Wall Street expectations of $8.09 and $16.9 billion respectively. Currently, analysts at Bank of America Merrill Lynch rate Alphabet as a BUY with a $905 price target. Justin Post and Joyce Tran, analysts at Bank of America Merrill Lynch, wrote, "...We see 4Q as a strong quarter for revenues and mobile search, while higher expenses could raise investment concerns. Google did emphasize 1Q seasonality on the call, possibly suggesting a deceleration in 1Q growth. Analysts at BAML highlighted 2 key takeaways that can drive Alphabet's stock higher in 2016: 1. Top-line growth Analysts noted that US revenue growth grew from 19 percent to 24 percent in this past quarter and was driven by mobile search and increasing YouTube advertising spending. Going forward, Alphabet has the potential to further penetrate both segments by increasing the usability of their search and video platforms while at the same time charging higher rates for improved ad placement. 2. Margins While operating margins for the past quarter were below estimates, analysts believe that with Alphabet's continued growth in mobile clicks, the company has the potential to drive increased profitability in the near term. Currently, Alphabet is trading at $786.58, up 4.60 percent.