After the DOJ’s initial proposed final judgment in its Google Search case was filed last night, Evercore ISI believes the government’s proposed array of remedies was “mostly as expected” given press reports in recent days indicating that the government would propose forced divestiture of Chrome and a potential divestiture of Android. However, the firm views the government’s proposed limitations on distribution agreements as “draconian” and given the roughly 6% downward move in Alphabet (GOOG) (GOOGL) shares today calls this “likely a negative surprise vs. investor expectations.” The firm’s “quick checks with legal experts” suggest a near-term negotiated settlement is unlikely and that the case could continue to act as an overhang on shares until a final judgment on remedies is received, likely in August of next year. Evercore maintains an Outperform rating and $205 price target on Alphabet shares.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
