Google (GOOG) Decline Could Create Buying Opp, Goldman Remains Patient
Goldman Sachs today maintained a Neutral rating on Google (NASDAQ: GOOG) and lowered its price target to $950.00 (from $965.00). Analyst Heather Bellini said she prefers to remain on the sidelines, but could become more constructive if shares continue lower.
"We remain on the sidelines in the near-term as we believe the company's model will start showing signs of change in terms of profit margins related to its hardware build out that might surprise the market over the next 12-18 months. That said, we would use the potential for a pullback related to this change to get more constructive on the shares," she said.
"Paid clicks grew 23% yoy vs. the Street at 20% (GSe 21%), while CPC's were -6% (reported and cc) vs. the Street view of -3% (GSe: -4%). We would expect GOOG to benefit from the migration to enhanced campaigns in 3Q13 and as such we are modeling CPCs to decline -2% yoy and -3% yoy in 4Q13. Once again, growth in distribution partner related TAC of 39% yoy outpaced the 18% growth registered from GOOG sites. Network revenue decelerated for the third quarter in a row, with management calling out the impact related to changes in its partner relationships, specifically to ensure quality user experiences."
For an analyst ratings summary and ratings history on Google (NASDAQ: GOOG) click here. For more ratings news on Google click here.
Shares of Google closed at $910.68 yesterday, with a 52 week range of $576.13-$928.00.
"We remain on the sidelines in the near-term as we believe the company's model will start showing signs of change in terms of profit margins related to its hardware build out that might surprise the market over the next 12-18 months. That said, we would use the potential for a pullback related to this change to get more constructive on the shares," she said.
"Paid clicks grew 23% yoy vs. the Street at 20% (GSe 21%), while CPC's were -6% (reported and cc) vs. the Street view of -3% (GSe: -4%). We would expect GOOG to benefit from the migration to enhanced campaigns in 3Q13 and as such we are modeling CPCs to decline -2% yoy and -3% yoy in 4Q13. Once again, growth in distribution partner related TAC of 39% yoy outpaced the 18% growth registered from GOOG sites. Network revenue decelerated for the third quarter in a row, with management calling out the impact related to changes in its partner relationships, specifically to ensure quality user experiences."
For an analyst ratings summary and ratings history on Google (NASDAQ: GOOG) click here. For more ratings news on Google click here.
Shares of Google closed at $910.68 yesterday, with a 52 week range of $576.13-$928.00.