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Google (GOOGL) (GOOG) PT Raised to $730 at RBC Capital

September 29, 2014 6:40 AM EDT
Get Alerts GOOGL Hot Sheet
Price: $147.68 +4.60%

Rating Summary:
    35 Buy, 9 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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RBC Capital analyst Mark Mahaney reiterated an Outperform rating and boosted his price target on Google (NASDAQ: GOOGL) (NASDAQ: GOOG) to $730.00 (from $650.00) after several key updates on the long thesis.

Mahaney said Google is still arguably the broadest play on internet secular growth. He highlighted:

#1: Core Search Growth Should Remain Highly Consistent Near-Term: Mahaney notes the company has consistently delivered 20%+ organic Y/Y revenue growth every Q since the ’08-’09 Recession, despite its massive revenue base ($64B run rate)

#2: Google Has Developed Three Material Medium-Term Growth Drivers: YouTube, Google Play, and Google For Work.

#3: At Least Two Of Google’s Long-Term Investments Look Very Promising: The analyst said continued investments in Wearable Devices (i.e. SmartWatches, Google Glass, etc…) and in the Connected Car (e.g. Android Auto) should position Google well for what we view as very large potential market opportunities five years down the road...

#4: Raising Our GOOGL PT To $730 – The firm is rolling its valuation framework forward and increasing our PT to $730 based on 20x P/E and 11x EV/EBITDA multiples on 2016 estimates ($36.44 in EPS / $36.1B in EBITDA).

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 $587.90 yesterday.



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RBC Capital, Mark Mahaney