Evercore ISI’s Cautious Outlook on Google Stock
Evercore ISI expressed a more cautious stance on Google (NASDAQ: GOOGL) in light of upcoming Department of Justice (DOJ) trials concerning Google’s search practices.
Following a webinar with legal experts Harry First, an NYU law professor, and Jennifer Rie, a senior litigation analyst at Bloomberg Intelligence, new concerns about potential legal outcomes were shared.
“We claim no legal expertise, but we have worked with these experts for some time and have found their opinions to be reasonable and unbiased,” said Evercore.
Both experts predicted that Google is likely to lose the liability aspect of the DOJ Search trial. Remedies from the court are anticipated by August 2025, and could be severe, imposing significant limitations on Google’s ability to finance distribution deals.
Evercore stated, “We now believe that those remedies are likely going to be severe, including significant restrictions on Google’s ability to pay for distribution deals.”
The likelihood of Google winning in the Appeals court is considered slim unless the initial remedies are extremely harsh.
As a consequence, Google could experience a significant loss of U.S. Search market share, potentially exceeding 10% by 2027.
Although a settlement with the DOJ is a possibility, Evercore warns it may still involve discontinuing default distribution payments. The judge in the Search trial acknowledged the evolving technology landscape, with competition such as ChatGPT emerging.
Evercore ISI remains cautiously optimistic due to Google’s robust valuation, strong competitive position, and potential in fields like generative AI and Waymo. However, they stress the importance of being “highly tactical” regarding stock entry and exit points.
In summary, the firm is now more cautious on Google shares, expecting substantial uncertainty in the next 12 months.
Comments (4)
Ronaldo
08:09 - 18/09/2024
Very gdsas
Ronaldo
08:09 - 18/09/2024
Very gdsas
Messi
15:18 - 17/09/2024
Nice
Ronaldo
08:10 - 18/09/2024
@Messi hi pro