Deutsche Bank Cuts Price Target on Google (GOOG) to $480

October 14, 2008 10:59 AM EDT

Deutsche Bank lowers estimates on Google (Nasdaq: GOOG), also cutting its price target from $635 to $480. Despite the estimate reduction, the firm maintains its Buy rating on shares of Google, saying "the stock already reflects a weakening consumer outlook, which is manifested in the model via lower monetization rates as well as the recent strength in the US dollar."

Ahead of Google's Q3 earnings, expected out Thursday after the close, the firm says its remains "constructive on the shares with the double-digit growth/profit outlook for the company." Deutsche's channel checks recently indicated that monetization rates were "somewhat flattish throughout Q3".

Deutsche said its lower estimates were "largely due to the strengthening dollar..." The firm's FY08 adj-EPS estimate moves from $19.75 to $18.78, versus the consensus of $19.45, while its FY09 estimate moves from $24.45 to $20.90, versus the Street estimate of $23.21.

The firm said its $480 price target on Google is based on 23x its FY09 EPS estimate.

Shares of Google are currently down about 2.9% to $370.50. Despite the lower price target, Deutsche's price target still represents potential price appreciation of more than 29% from current levels.

Google, Inc., a technology company, maintains index of Web sites and other online content for users, advertisers, Google network members, and other content providers.

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