BMO Capital Says Market More Comfortable on Google (GOOG) Post Q4; Trims PT to $790

January 23, 2013 8:17 AM EST
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BMO Capital trims its price target on Google (NASDAQ: GOOG) from $800 to $790 following Q4 results. The firm is keeping an Outperform rating.

Analyst Dan Salmon comments, "We believe positive stock reaction after hours was in response to stabilization of CPC declines; as important to us, it says that the market is increasingly comfortable with secular online ad price pressure across the industry and it is now changes in the rate of decline that is in focus. The simple view focuses only on mobile mix shift and misses the effect of things like programmatic buying or the lack of industry supply constraints. With the CPC issue now on the back-burner (until another second-derivative inflection point of course), Google's leadership in multi-screen IP advertising should hopefully shine through, helped by data points like the fact that Global 100 advertisers doubled their spend on YouTube this year. Potential catalysts include: 1) positive Motorola hardware sentiment going into 2H13 (when the pre-GOOG pipeline begins to wash out), and; 2) positive impact of the new ads-included YouTube app for iOS. Likewise key risks are: a) Amazon's moves into ads, and; b) potential international tax changes."

The firm lowered 2013 non-GAAP EPS to $46.50 from $47.00.

For an analyst ratings summary and ratings history on Google click here. For more ratings news on Google click here.

Shares of Google closed at $702.87 yesterday.

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