The controversial Republican tax bill is not yet final, but Wall Street already has a picture of how the bottom line of companies such as Amazon.com Inc. , Facebook Inc. , Alphabet Inc.
Many tech stocks pulled back early this week as money flowed into sectors that would see greater benefits from the bill.
The big tech companies may not benefit as much as their peers that pay more taxes. Cowen & Co. analyst John Blackledge noted Thursday that reducing the corporate rate from 35% to 22%, where President Trump said it could settle, will have a noticeable effect on profits.
The new rules could save $723 million for Amazon in 2018, Blackledge estimates. Amazon's effective tax rate would fall from 30% to 13.25%, he estimates. The cash could boost Amazon's projected 2018 earnings by 24.2%, from $5.69 per share under the current rules to $7.07 per share under the Republican plan.
Facebook stands to gain $1.56 billion from the tax cuts, Blackledge estimates. Its earnings would climb 7.7%, from $6.87 to $7.40 per share.
Meanwhile, Alphabet would save $2.28 billion, producing an 8.1% increase in earnings from $39.92 to $43.15 per share.
Source: Bloomberg Pro Terminal
Trader Bozhidar Arbadzhiev
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