top 3 for 2019
PMorgan Chase on Thursday shared with its clients the firm's best Internet stock picks for 2019.
The bank's Internet sector analyst Doug Anmuth looked through his entire coverage universe to come up with a list of three companies he had the highest conviction for big returns next year.
Here are the three Overweight-rated companies that made his "Best Ideas in 2019" list, and their price targets.
Facebook (FB)
Anmuth has a December 2019 $195 price target for Facebook stock, representing 35% upside from Wednesday's close.
"We expect Facebook to operate its way up the wall of worry in 2019," he wrote. We find the "current valuation compelling."
The analyst said he expects strong sales growth from the company's Facebook and Instagram Stories features. He also cited its attractive valuation of 16.5 times 2020 estimated earnings.
Amazon.com (AMZN)
The analyst has a December 2019 price target of $2,100 for Amazon shares, which is 26% upside from Wednesday's close.
"AMZN's fastest growing revenue streams are its most profitable & driving margin expansion," he wrote. "Core retail trends remain strong w/ revenue acceleration likely in 1Q19."
Anmuth is optimistic the company's Amazon Web Services and advertising businesses will increase the company's overall profit margins next year.
Twitter (TWTR)
Anmuth has a $45 December 2019 price forecast for Twitter stock, representing 24% upside from Wednesday's close.
"Platform quality efforts (aka health work) are positive," he wrote. Though a near-term "drag on user metrics & headlines, but [they] should drive more engagement & advertising over time."
In its second quarter letter to investors, the company said it aggressively removed spam accounts and lowered the visibility of "suspicious" accounts from possible malicious actors.
The analyst cited Twitter's video offerings and improved topic "discoverability" as key positive drivers for its platform. He predicts strong sales growth from large advertisers in 2019.
