YouTube engagement remains steady, says Credit Suisse

In a research note ahead of Alphabet’s results, Credit Suisse analyst Stephen Ju notes conversations with advertisers suggest that strength in certain verticals is offset by weakness in others. At this point, the firm does not have reasons to believe that its estimates for online advertising for 2023 should really increase as budget growth expectations seem bracketed to a 0%-5% range. More near-term, checks are pointing to an in line to slightly better result for Search in Q1, Credit Suisse says. The firm also notes that feedback for YouTube remains soft given higher brand exposure. As such, its current 2023 FXN growth projections for Search and Other stands at 3.4% and YouTube at 4.0%. Credit Suisse also updates engagement/time spent data and the time series continues to suggest that YouTube has effectively triaged the potential challenge from the proliferation of TikTok. The firm has an Outperform rating on the shares with a price target of $136.