Google (GOOG) Target Lifted to $1400 at RBC Capital

January 31, 2014 6:18 AM EST Send to a Friend
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Price: $537.50 +0.50%

Rating Summary:
    44 Buy, 14 Hold, 1 Sell

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Today's Overall Ratings:
    Up: 13 | Down: 18 | New: 41
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RBC Capital analyst Mark Mahaney reiterated an Outperform rating on Google (NASDAQ: GOOG) and raised his price target from $1,300 to $1,400 citing strong Google core Q4 performance.

Positives takeaways from the quarter, according to Mahaney: 1. Core Organic Rev. Growth of 23% Y/Y – marking the 16th straight quarter of 20%+ growth and a reacceleration from Q3; 2. Solid Advertising Revenue Growth – Advertising (Search and Display) grew an accelerating 17% Y/Y continuing to perform well on a tougher comp; 3. Shedding MMI – deterioration to (31%) Non-GAAP Op. Margin in the quarter shows that Google is getting out of Motorola “just in time;” 4. Core GOOG Int’l Rev. Growth Accelerated to 30% Y/Y – ROW performed especially well driven by strength in APAC; and 5. TAC Trends appear to have stabilized. Negatives – 1. Higher-Than-Expected MMI Losses – Y/Y Rev declines may have bottomed, but Op. Losses hit new highs – likely still months before the divestiture closes; 2. Core GOOG Non-GAAP Op. Margin Down 220bps Y/Y – though we are generally in favor of sacrificing margin to invest in long-term growth drivers.

The firm raised 2015 Non-GAAP EPS increases from $60.11 to $61.65.

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 $1135.39 yesterday.


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