Morgan Stanley Lowers View of Internet Stocks

Monday, 11 Nov 2013 05:40 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Morgan Stanley lowered its industry view on Internet stocks to "in-line" from "attractive," saying growth in the sector needs to accelerate to justify current valuations.

Shares of Facebook Inc. and LinkedIn Corp. have more than doubled in the past year, and trade at 44 and 97 times forward earnings, according to Thomson Reuters data. Google Inc.'s shares have risen 56 percent in the same period and trade at almost 20 times earnings, data showed.

Morgan Stanley analysts said the rise in the valuation of internet stocks has been due to investors looking at the total addressable market (TAM) opportunity with minimal focus on risks.

"There may not be enough TAM for all of our companies to achieve long-term estimates," the analysts wrote in a client note on Monday.

Morgan Stanley removed Google from its Best Idea List, saying that catalysts have played out.

The brokerage, however, maintained its "overweight" rating on Google and other internet stocks including eBay Inc., Amazon.com, LinkedIn and Facebook.

"While we still believe that our Overweight-rated stocks hold upside, we find overall valuation for the entire group to be unflattering."

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web
Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved