Deutsche Bank analyst Ross Sandler reiterated a Buy rating on Google Inc (NASDAQ:GOOG) and raised the price target on the stock to $625 (from $615), following the tech giant’s results for the fourth quarter of fiscal year 2014 (4QFY14).
Mr. Sandler believes the company has made it through the worse times and that the bear case is “misguided.” The company’s earnings per share (EPS) and revenue missed the Street’s estimates by 4% and 2%, respectively. This drop in Google’s bottom-line numbers was primarily due to once-only expenses and foreign exchange impacts, he stated.
The company recorded an increase of 300 basis points (excluding foreign exchange impact) in the rate of growth for its websites revenue. Websites paid clicks increased year-over-year, with a 5-point increase in two years. Google had modest growth acceleration for its UK business, which indicated a steady growth for its core search segment, the analyst said.
According to the analyst, Google’s management said about the investment outlook for 2015 that it aims to “balance growth and discipline, and throttle back.” Deutsche Bank is of the opinion that at 14 times 2016 consensus EPS, there is a possible 40% upside and only 5% downside for the stock.
Mr. Sandler believes that the latest conference call by Google had a tone which seemed to be more inclined toward shareholder satisfaction, since the company mentioned focusing on its stock price. The company intends to increase its stock price in order to boost the morale of its employees.
“The bear case around ‘everything looking like the UK’ appears to have dissipated a bit in 4Q, with the UK up very modestly, but more importantly, overall websites growth (excluding foreign exchange impacts) reaccelerated (clicks and revenue),” he said.
Overall, the sell-side is bullish on Google stock. Of the 57 analysts providing coverage on the stock, 44 give it a Buy rating, while 13 assign a Hold rating. The 12-month average price target assigned by the analysts is $620.83, reflecting an upside of 16.15% over the last closing price.
Google shares closed at $534.52 Friday, up 4.67%. |
发表于 2015-1-30 15:10
| 
