Expect Google (GOOGL) To Post A Strong Topline Q4 Report - Goldman Sachs

Goldman Sachs maintains Conviction Buy on Google (NASDAQ: GOOGL), keeps price target of $970.00.

Analyst Heather Bellini comments "Our checks with Google marketing partners pointed to 4Q16 Google spend coming in above expectations with some partners noting material uptick. Checks cited strength in pricing driven by the increasing ROI as mobile sites improve, continued PLA demand, and the 4th ad link on smartphone driving a more competitive auction. While a few marketing partners noted some slowdown in ad spend in early November with the US presidential election, partners said spend snapped back in late November with Cyber Week and remained strong for the balance of the quarter. Margins. We note that last quarter, core Google Business operating margins declined by 60bps yoy versus increasing by 140bps in 1Q16 and 160bps in 2Q16. Our 4Q16 operating margin assumption is 130bps below consensus as we believe the Pixel could drive margin pressure. We note Pixel revenue of $2.0-$2.6bn (3-4mn units at $649) at an operating margin of 5-10% would drive ~200-250bps of margin pressure."

Google is expected to report Q4 earnings on Thursday January 26, 2017

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 $828.17 Friday.

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