Citizen JMP Securities Analyst Andrew Boone has downgraded Alphabet's rating from "outperform" to "market perform," stating that after the rise in Alphabet's stock price, investors have pulled back and will remain on the sidelines. A USA court ruled last year that Google holds a monopoly in the general search service and advertising sector, but the court has yet to decide on potential remedies or how to resolve the dispute. The court is expected to hold hearings in March or April of this year and issue a ruling in August.
Boone believes this case will become a major focus for investors in the coming year, thereby limiting the stock's multiple expansions. Although Google may appeal, and the ruling may take years to enforce, Boone expects the "penalty will be quite severe." He believes that clearer judicial progress on the lawsuit is needed to hold a positive view on the stock, which is currently reasonably valued.
