Google (GOOG) Turns the Page; Bullish Analysts Push Price Targets
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Price: $157.18 -2.43%
Rating Summary:
41 Buy, 6 Hold, 1 Sell
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Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
41 Buy, 6 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Google Inc. (NASDAQ: GOOG) announced Thursday that CEO Eric Schmidt will step aside, making way for Larry Page to take the reins, bringing the company's holy trinity of management to an end.
The move was well timed, as Google posted blowout fourth-quarter results. Now the company will look to restore the qualities that made Google the fastest growing company in history.
"While this move could not have happened at a better time, considering the backdrop of the blockbuster quarter, it does introduce a level of uncertainty around execution under the new leadership, particularly considering the growing competitive landscape," Jefferies & Co. analyst Youssef H. Squali said in a note to investors on Friday.
Recently the world's largest Internet search company has had missteps that were not present in the nascent days of its exploding growth. Namely the botched releases of Wave and Buzz. Not to mention the initial blahness of Google TV, and the uncertainty surrounding the Chrome operating system.
So it stands to reason that Schmidt, Page and Sergey Brin sat down and pondered what was causing this state of relative staleness. The problem they came up with was the three-headed monster that has perpetually needed triple the approval to make a move.
Handing over the reigns of the company to Page stands to return to Google to the glory days of expansion, while Schmidt handles the increasing regulatory obstacles (China) and concentrates on the "ideas" that made Google a world power.
Schmidt has played his part well since being brought on board in 2001, in what he referred to as a "parental" capacity. When he arrived, Google was made up of just a few hundred employees, and is now represented across the globe with 25,000 workers creating whats next.
Google has however been losing some of its top talent to the insurgency of Facebook, which surpassed Google as the most visited website in 2010. Schmidt was unable to compete in social networking and now Facebook threatens to temper the Internet advertising cash cow create by Google.
Where does Brin fit in? Just think of him as the Steve Wozniak of Google, as he will be deeply involved in public relations and the innovation of upcoming products.
Now that the Schmidt's babysitting days are apparently over, Page will have to show what he has learned as the company shifts to more significant growth in mobile and display.
Shares of Google are up $2.29 to $629.06 in midday market movement on Friday.
Analyst Comments:
Jefferies & Co. maintained a Buy rating on Google, while lifting its price target from $710 to $800.
Jefferies analyst says, " Strong volume and pricing trends in its core business, and solid traction in non-search segments allowed Google to comfortably exceed Street expectations. We remain bullish on the name as it remains one of the biggest beneficiaries of online advertising growth in 2011."
UBS said Google is well positioned for growth in 2011 as the firm reiterated a Buy on Google and raised its price target from $735 to $780.
"For 2011, Google will focus investment into: 1) Display, 2) YouTube (revenue doubled in 2010), 3) Android, and 4) Enterprise, as well as the areas of Local and Commerce. Each of these areas should deliver healthy returns in 2011," UBS analyst said. "We do not expect material changes to the strategy, and believe the company will be in capable hands under Page."
Needham & Co. maintained a Buy rating on Google with a price target of $700.
Needham analyst says, "We continue to be impressed w/ rev trends and new-growth opportunities like display and mobile, and as such, we are increasing our ests but note that we expect topline growth to be tempered in the near-term by a continued ramp in growth investments. Our CY11 net revenue, adj. EBITDA, adj. EPS ests increase to $26.69BN, $15.73BN and $34.46, resp."
Deutsche Bank sees Google bringing back the growth in 2011. The firm reiterated a Buy rating on Google, while raising its price target on the stock from $650 to $725.
Deutsche Bank analyst says, "With an improved growth profile, we think the market re-visits the Google story as a core growth holding in the Internet, tech and media landscape. Investment risks include: slowing query growth, slowdown in ad spending, competition, currency fluctuations, tech obsolescence, and new interactive media."
Goldman Sachs sees Google's management decision as a streamlining of the company's decision making process, and not a major strategic shift.
The firm reiterates a Buy rating on Google, while raising its price target on the stock from $700 to $720.
Kaufman Bros. reiterated a Buy rating on Google and raised its price target from $690 to $705 on the stock.
Kaufman analyst says, "We believe Google has a strong new CEO in Mr. Page, who has vision, new ideas, technology expertise and operating experience at Google. Mr. Page has also worked closely with Mr. Schmidt for a decade and has the benefit of having him as an advisor going forward. In addition, Google is now a large company with a deep bench of seasoned executives."
Wells Fargo sees the current product cycle in full swing for Google.
The firm reiterated an Outperform rating on Google, while raising its valuation range on the stock from $700-$720 to $750-770.
Wells Fargo analyst says, "We like the appointment of co-founder Larry Page to the CEO post and think it is a positive as we believe Google needs to continue to sharpen its product execution in core search, display, mobile, and of course social. We expect Google to continue to benefit from the improving advertising environment, due to a strengthening economy, ongoing improvements in the ad platform, which we are calling a product cycle, as well as a consumer shift online."
Janco Partners maintained a Buy rating on Google and raised its price target from $678.07 to $759.89.
The firm said, "It’s not immediately clear to us how complicated the decision making process had become warrant the departure of Schmidt, nor is apparent to us that Page’s newly acquired executive singularity will prove superior to a structure that had intelligently managed their growth over the last decade. What is apparent is that Google must aggressively reshape its culture if they expect to accelerate innovation and performance growth."
Canaccord Genuity maintained a Buy rating on Google, while raising its price target on the stock from $750 to $800.
Canaccord analyst says, "Q4 for Google showed the kind of accelerating growth that we expect to continue as ad dollars shift online, Google continues to gain share in search, mobile drives significant growth in usage, and display becomes more meaningful. While the management reshuffling adds a minor degree of uncertainty, we believe GOOG has significant price performance catch-up ahead."
The move was well timed, as Google posted blowout fourth-quarter results. Now the company will look to restore the qualities that made Google the fastest growing company in history.
"While this move could not have happened at a better time, considering the backdrop of the blockbuster quarter, it does introduce a level of uncertainty around execution under the new leadership, particularly considering the growing competitive landscape," Jefferies & Co. analyst Youssef H. Squali said in a note to investors on Friday.
Recently the world's largest Internet search company has had missteps that were not present in the nascent days of its exploding growth. Namely the botched releases of Wave and Buzz. Not to mention the initial blahness of Google TV, and the uncertainty surrounding the Chrome operating system.
So it stands to reason that Schmidt, Page and Sergey Brin sat down and pondered what was causing this state of relative staleness. The problem they came up with was the three-headed monster that has perpetually needed triple the approval to make a move.
Handing over the reigns of the company to Page stands to return to Google to the glory days of expansion, while Schmidt handles the increasing regulatory obstacles (China) and concentrates on the "ideas" that made Google a world power.
Schmidt has played his part well since being brought on board in 2001, in what he referred to as a "parental" capacity. When he arrived, Google was made up of just a few hundred employees, and is now represented across the globe with 25,000 workers creating whats next.
Google has however been losing some of its top talent to the insurgency of Facebook, which surpassed Google as the most visited website in 2010. Schmidt was unable to compete in social networking and now Facebook threatens to temper the Internet advertising cash cow create by Google.
Where does Brin fit in? Just think of him as the Steve Wozniak of Google, as he will be deeply involved in public relations and the innovation of upcoming products.
Now that the Schmidt's babysitting days are apparently over, Page will have to show what he has learned as the company shifts to more significant growth in mobile and display.
Shares of Google are up $2.29 to $629.06 in midday market movement on Friday.
Analyst Comments:
Jefferies & Co. maintained a Buy rating on Google, while lifting its price target from $710 to $800.
Jefferies analyst says, " Strong volume and pricing trends in its core business, and solid traction in non-search segments allowed Google to comfortably exceed Street expectations. We remain bullish on the name as it remains one of the biggest beneficiaries of online advertising growth in 2011."
UBS said Google is well positioned for growth in 2011 as the firm reiterated a Buy on Google and raised its price target from $735 to $780.
"For 2011, Google will focus investment into: 1) Display, 2) YouTube (revenue doubled in 2010), 3) Android, and 4) Enterprise, as well as the areas of Local and Commerce. Each of these areas should deliver healthy returns in 2011," UBS analyst said. "We do not expect material changes to the strategy, and believe the company will be in capable hands under Page."
Needham & Co. maintained a Buy rating on Google with a price target of $700.
Needham analyst says, "We continue to be impressed w/ rev trends and new-growth opportunities like display and mobile, and as such, we are increasing our ests but note that we expect topline growth to be tempered in the near-term by a continued ramp in growth investments. Our CY11 net revenue, adj. EBITDA, adj. EPS ests increase to $26.69BN, $15.73BN and $34.46, resp."
Deutsche Bank sees Google bringing back the growth in 2011. The firm reiterated a Buy rating on Google, while raising its price target on the stock from $650 to $725.
Deutsche Bank analyst says, "With an improved growth profile, we think the market re-visits the Google story as a core growth holding in the Internet, tech and media landscape. Investment risks include: slowing query growth, slowdown in ad spending, competition, currency fluctuations, tech obsolescence, and new interactive media."
Goldman Sachs sees Google's management decision as a streamlining of the company's decision making process, and not a major strategic shift.
The firm reiterates a Buy rating on Google, while raising its price target on the stock from $700 to $720.
Kaufman Bros. reiterated a Buy rating on Google and raised its price target from $690 to $705 on the stock.
Kaufman analyst says, "We believe Google has a strong new CEO in Mr. Page, who has vision, new ideas, technology expertise and operating experience at Google. Mr. Page has also worked closely with Mr. Schmidt for a decade and has the benefit of having him as an advisor going forward. In addition, Google is now a large company with a deep bench of seasoned executives."
Wells Fargo sees the current product cycle in full swing for Google.
The firm reiterated an Outperform rating on Google, while raising its valuation range on the stock from $700-$720 to $750-770.
Wells Fargo analyst says, "We like the appointment of co-founder Larry Page to the CEO post and think it is a positive as we believe Google needs to continue to sharpen its product execution in core search, display, mobile, and of course social. We expect Google to continue to benefit from the improving advertising environment, due to a strengthening economy, ongoing improvements in the ad platform, which we are calling a product cycle, as well as a consumer shift online."
Janco Partners maintained a Buy rating on Google and raised its price target from $678.07 to $759.89.
The firm said, "It’s not immediately clear to us how complicated the decision making process had become warrant the departure of Schmidt, nor is apparent to us that Page’s newly acquired executive singularity will prove superior to a structure that had intelligently managed their growth over the last decade. What is apparent is that Google must aggressively reshape its culture if they expect to accelerate innovation and performance growth."
Canaccord Genuity maintained a Buy rating on Google, while raising its price target on the stock from $750 to $800.
Canaccord analyst says, "Q4 for Google showed the kind of accelerating growth that we expect to continue as ad dollars shift online, Google continues to gain share in search, mobile drives significant growth in usage, and display becomes more meaningful. While the management reshuffling adds a minor degree of uncertainty, we believe GOOG has significant price performance catch-up ahead."
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