Initial proposed set of Google remedies in line with expectations, says BofA

While the court filing in which the DOJ outlined its initial proposed monopoly remedies, including a broad set of potential measures aimed at addressing how Alphabet may distribute and manage its Search services in the future, did weigh on the stock yesterday, BofA said the firm expected the DOJ to be aggressive, per press reports, and believes that the initial proposed set of remedies were “generally in line with investor expectations.” The firm, which anticipates “more twists and turns in the case ahead,” sees positives, including its belief that Google is well-positioned in the search market today; that Google’s counter proposals in December will likely provide a more positive potential outcome; that limited layoffs so far compared to peers give the company’s new CFO a positive cost basis set up to drive EPS growth; and the view that Alphabet already trades at a discount to break up value. BofA maintains a Buy rating and $206 price target on Alphabet shares.