UPDATE - BGC Partners upgrades Google (GOOG) to Buy; Raising Estimates, Driven by Increases in Click Pricing

UPDATE - BGC Partners upgrades Google (Nasdaq: GOOG) from Hold to Buy. Price target raised $10 to $650.

Analyst, Colin Gillis, said, "We increase our rating of Google, and increase our revenue and earnings estimates above consensus ahead of earnings on Thursday October 13, postmarket. Our revenue estimate is fueled by our expectation for above average increases in click pricing, which we estimate are going to increase by 12% YoY, compared to 4% growth in the prior year and 12% growth in the prior quarter. Google has been effective at capturing the economics associated with improving conversions. This is shown in the acceleration of click pricing that has been occurring since the start of 2011. We expect the company is able to maintain click price growth exceeding 10% for the rest of the year."

"Our net revenue estimate of $7.5B is growth of 38.2% YoY and 9.5% sequentially. Our net revenue estimate is above consensus estimates of $7.2B. Our adjusted EPS estimate of $9.05 compares to $7.64 in the prior year and $8.74 in the prior quarter. Consensus adjusted EPS is $8.74. Our operating margin estimate is 32.2% and compares with 35% in the prior year and 31.9% in the prior quarter."

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