- KeyBanc saw another volatile advertising earnings season as inflation and macro pressures weighed on advertising budgets.
- KeyBanc saw diversified advertisers (Overweight-rated Alphabet Inc (NASDAQ: GOOG) (NASDAQ:GOOGL) and The Trade Desk Inc (NASDAQ:TTD)) within the internet sector facing the least fundamental risk.
- Alphabet's price target of $3,075 reflected a 2023E GAAP P/E multiple of 22.1x.
- With enhanced disclosures of Google Cloud, it saw investor focus shift toward a sum-of-the-parts framework, which will help drive multiple expansions.
- The Trade Desk's price target of $90 reflected a 22x 2023E EV/S.
- It saw TTD trade above peers due to its rapid growth rate, 30%+ EBITDA margin structure, and strategic value as the largest independent AdTech platform.
- Conversely, it saw e-commerce end product remaining a headwind to Overweight-rated Facebook rebranded Meta Platforms Inc (NASDAQ: FB) and Pinterest Inc (NYSE: PINS).
- Meta's price target of $280 reflected a 2023E GAAP EPS multiple of ~22.1x.
- KeyBanc saw Meta's numerous growth initiatives (e.g., WhatsApp, Facebook Shops, Instagram Reels, Oculus, A/R, etc.) create a potential for meaningful LT revenue, EBITDA, and EPS growth.
- Pinterest's price target of $36 reflected 6.0x 2023E EV/S.
- While it remained constructive on Overweight-rated Snap Inc (NYSE:SNAP), we are cautious about the rate of reacceleration contemplated in Street models for 2022E/2023E revenue growth.
- Snap's $45 price target reflected a 2023E EV/S multiple of 10.1x.
