'Staggering' Google Breakup Proposal From DOJ A 'Kitchen Sink Moment': Alphabet Analyst

On Wednesday, the Department of Justice released its remedy requests aimed at curbing Google’s search engine dominance. Alphabet, Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google responded that the proposed remedies were "staggering." Analysts are sharing their reactions as well. 

• BMO Capital Markets analyst Brian Pitz reiterated an Outperform rating on Alphabet and kept the price target at $217.
• JPMorgan analyst Doug Anmuth maintains Alphabet with an Overweight rating and raised the price target to $212.
• Goldman Sachs analyst Eric Sheridan maintained a Buy rating and kept the price target at $210.

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Pitz described the sweeping remedies proposed by the DOJ as a "kitchen sink moment.” Pitz noted that the DOJ's proposed remedies extend past Google's search distribution partnerships with Apple and Samsung and included the company's AI search-based investments. 

Anmuth echoed similar sentiments regarding the "very comprehensive" set of remedies proposed by the DOJ. He said parts of the remedies are "more punitive than expected" and listed those around consumer choice limitations and the syndication of search data and ads as examples. 

The DOJ's proposal should represent the worst-case scenario for Google, reminded Anmuth. He expects Google's proposed final remedies to be much more modest. 

"Ultimately, we believe the judge's final decision next summer will be more balanced … and will likely have greater consideration around the potential negative impact to users," the JPMorgan analyst wrote. 

Sheridan said the firm does not take a view on a potential outcome of the case. He noted, however, that leadership at the US DOJ will change in January with the incoming Trump administration which adds an additional variable to the potential outcomes of the trial. 

The analyst also pointed to recent comments from President-elect Donald Trump expressing skepticism on a potential break-up of Google. 

"If you do that, are you going to destroy the company? What you can do without breaking it up is make sure it’s more fair,” Trump said in October, per Reuters. 

Price Action: According to Benzinga Pro, Alphabet shares are down 1.55% at $166.62 at the time of publication Friday. 

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Image: Simon from Pixabay