It appears that this year's ecommerce action during Thanksgiving and Black Friday has been slightly lower than predicted with online spend for both days failing to show year-over-year growth for the first time.
Truist's Youssef Squali believes the trend reflects not only some difficult comps but is also down to an earlier start than usual to the holiday season shopping extravaganza with retailers offering deals as early as October, fearing supply chain issues affecting deliveries.
Nevertheless, boosted by a healthy consumer and "highly effective" digital channels which have been perfected following two years of the pandemic, the analyst anticipates "another record-setting" ecommerce holiday season, exhibiting 10% to 15% year-over-year growth.
And Squali sees one company as best-positioned to reap the rewards.
"We expect Alphabet (GOOGL) to post the highest top line growth rate in 4Q21 (at +25% Y/Y), which would be an impressive feat given it's off of the largest ad revenue base in the world," the 5-star analyst said. "As the most effective online customer acquisition channel at scale and during the highly promotional holiday season, Google is set to benefit greatly, in our view."
While Squali expects pure-play ecommerce platforms such as Amazon and eBay to suffer both from tough comps and losing share to "off-line omni-channel platforms offering click-online/pick-up in store" (this season these are expected to account for more than 25% of all orders), this is not a problem which affects Google.
Neither are the problems posed for social platforms due to Apple's recently implemented ATT and IDFA removal. In contrast to social platforms which are dependent on data collected from app and web tracking, Search relies on "customer intent" and therefore is the most "defensible against privacy and targeting changes."
"As such," Squali summed up, "We view GOOGL as more insulated than social platforms from tracking changes, and see the potential for a larger portion of ad dollars being allocated towards GOOGL this holiday season."
To this end, Squali reiterated a Buy on GOOGL shares backed by a $3,400 price target. The implication for investors? Upside of 19%. (To watch Squali's track record, click here)
Most of Squali's colleagues agree. GOOGL stock's Strong Buy consensus rating is based on 26 Buys vs. 2 Holds. Even after this year's bountiful share haul (up 63% year-to-date), the $3,350.19 average price target, suggests shares will climb by another 17% in the year ahead. (See GOOGL stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.