Cramer Calls Google (GOOG) 'Too Cheap', Sets $600 Price Target
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Jim Cramer touted shares of the recently-over-$500 per share Google (Nasdaq: GOOG) on this afternoon's Stop Trading!.
The pundit called Google too cheap and implied that investors are not justified in their concerns that Microsoft's (Nasdaq: MSFT) Bing is picking up a lot of Google's market share. On the contrary, Cramer said Bing should already control more of the search market, considering how much money Microsoft put into it. Cramer also mentioned that, according to his checks, most ad agencies are afraid not to use Google in light of the current -- although recovering -- environment.
Cramer said that Google will move from a 21% grower this year, to a 23% grower next year. He called a multiple of 20x "reasonable" and said he now has the Street high EPS estimate for this year: $30. This valuation places Google shares squarely at $600, suggesting upside of about 20% from current levels.
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