Susquehanna Starts Google (GOOGL) (GOOG) at Positive

Susquehanna initiates coverage on Google (NASDAQ: GOOGL) (NASDAQ: GOOG) with a Positive rating and a price target of $800.00.

Analyst Shyam Patil commented, "We believe Google may have turned the corner after its most recent quarter. Several growth drivers are becoming clearer (mobile search, Ad Tech, YouTube, Play) and the new CFO appears to be striking a more disciplined tone around expense management and seems open to a more shareholder-friendly capital allocation approach."

The analyst sees six key drivers that are lining up for Google:

1) Mobile search is gaining momentum. While the core search business is slowing, mobile search should be the next growth leg where Google is even more dominant than on desktop. Mobile CPCs are improving and should help support faster mobile search revenue growth.

2) The Ad Tech stack should benefit from the shift to programmatic. We believe Google has the most comprehensive end-to-end Ad Tech stack and is well positioned to capitalize on the industry shift toward programmatic.

3) YouTube is experiencing rapid growth and will be a key beneficiary as video ad spend migrates online. We believe video is the next big budget that will shift from offline to online. YouTube is currently the dominant online video platform and should benefit disproportionately.

4) The Play store has quickly become an important revenue stream and should continue to capitalize on Android’s global dominance.

5) The new CFO appears to be focused on maintaining tighter opex and capex controls, as evidenced by sequential declines in both items in 2Q.

6) While the new CFO has been non-committal and ambiguous, her tone suggests the door is potentially open for capital returns to shareholders.

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 $635.30 yesterday.

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