Google (GOOGL) (GOOG) PT Trimmed to $725 at Evercore
Evercore Partners analyst Ken Sena lowered his price target on Google (NASDAQ: GOOGL) (NASDAQ: GOOG) to $725.00 (from $750.00) but maintained a Buy rating.
Sena comments, "For 4Q, on largely unchanged revenue, we’re lowering adj. EBIT by 4% to $6.0bn on higher R&D and Sales and Marketing, bringing EPS to $7.14 from $7.43). Our 2015 adj. EBIT falls a modest 2% to $27.7bn. Despite the increased investment, we are nevertheless encouraged by traction in recent innovations, including Shopping Campaigns and Google Express."
On the quarter, he said, "Net revenues of $13.2bn, or 22% y/y, were largely in-line with our $13.3bn expectation, driven by better than expected CPC growth of -2% (vs. -4% est.) on better mobile pricing, but partially offset by softer paid clicks (+17% vs. 24%) from quality improvements, geographic factors and other. Investments drove a nearly 4% miss to adj. EBIT, which came in at $5.4bn, or 41% of net rev. Elevated seasonal hiring trends were cited as the company ramps its engineering headcount. Capex at 15% of sales was slightly lower than in 2Q (17%), and consistent with levels in 3Q13, but still more than double FY12 levels driven by data centers, machine computation, and real estate."
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Shares of Google closed at $536.92 yesterday.