Internet trends for these top five in their respective sectors — online advertising, retail and travel — remain very consistent, with strong revenue growth year over year, RBC said in a research report.
Online advertising seems to be flowing en mass to Google-owner Alphabet and Facebook, with the two now accounting for close to 55% of global online advertising revenue, up from 50% three years ago, says the report from RBC analyst Mark Mahaney. And Amazon continues to show dramatically greater-than-average growth in the online retail sector.
“We believe online retail demand trends have remained solid, particularly highlighted by Amazon’s retail sales acceleration,” Mahaney wrote. But, he said, “there’s little ad oxygen for the likes of Yahoo (YHOO).”
Online travel remains a duopoly of Priceline and Expedia (EXPE), while it’s increasingly hard to see anyone catching up to Netflix in terms of video-streaming subscribers, he wrote.
Though shares of Netflix have continued to decline following Q1’s weak international subscriber guidance and domestic price change worries, “We view the fundamental global subscriber growth story as intact,” Mahaney said.
Mahaney has a price target on Netflix of 140. Netflix rose 1.4% to 89.12 in the stock market today. The stock is down 20% since reporting first-quarter earnings on April 18, and it’s on the IBD Swing Trader list as a potential short-sale opportunity.
He has a price target on Priceline of 1,600, as growth and profitability trends remain intact. Priceline stock rose 0.4% to 1283.47 on Monday. Priceline is down 6% since reporting Q1 earnings on May 4.
On Alphabet, Mahaney’s price target is 1,000, as it remains one of the best portfolio plays on the biggest Internet trends. Alphabet stock climbed 0.75% to 730.30 Monday. The stock is down 7% since reporting Q1 earnings on April 21.
On Facebook, the price target is 165, with Mahaney saying the social media company is firing on all cylinders. Facebook stock fell about 1% to 118.67, but it’s up 8% since reporting Q1 earnings on April 27. Facebook is holding above a buy point at 117.09.
The price target on Amazon is 800. Amazon stock edged up 0.1% to 710.68. Still, it’s up 16% since reporting Q1 earnings on April 28. It also is on Swing Trader, but as a long possibility.