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Jefferies positive on Alphabet's new CFO, sees potential for stronger returns

Published 06/06/2024, 12:32
© Reuters.

Jefferies maintained a Buy rating on Alphabet (NASDAQ:GOOGL) following the appointment of Anat Ashkenazi as CFO, citing her strong track record and potential to unlock shareholder value.

"We believe investors will look positively on GOOGL's appointment," states Jefferies, which has a $200 price target on GOOGL.

Analysts highlight Ashkenazi's impressive tenure at Eli Lilly (LLY), where the shares delivered an over 300% return during her time as CFO, significantly outperforming the S&P 500.

Jefferies expresses optimism that Ashkenazi will bring more transparency to Alphabet. "We look positively on the potential for Anat to bring much needed disclosures to GOOGL such as revenue, margin, & EPS guidance," the firm says. Jefferies believes this could lead to a higher valuation for the company.

Ashkenazi's experience managing a large portfolio of businesses at Eli Lilly is another positive for Jefferies. "Eli Lilly is a ~$800Bn market cap company with an extensive portfolio of pharmaceutical assets," writes Jefferies.

Analysts believe her experience translates well to Alphabet's diverse businesses, including its "Other Bets" ventures.

The note also highlights Ashkenazi's background in the life sciences as potentially beneficial for Alphabet's investments in AI. "We believe that Anat's experience as CFO of a biotech company will suit her well to steer GOOGL in the age of AI," Jefferies states.

Analysts believe she can balance investments in potentially lucrative but uncertain AI ventures with maintaining healthy profit margins.

Finally, Jefferies views Ashkenazi's experience with acquisitions at Eli Lilly as potentially indicative of future M&A activity at Alphabet, although they acknowledge the regulatory challenges the company faces.

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