Find What i Write

Google given $400 price target

While investors were busy unloading Google Inc.'s stock after the company warned Thursday of slowing third-quarter sales growth, Prudential Equity Group LLC analyst Mark Rowen went the other way, raising his price target for the world's biggest media company to $400 (U.S.), the highest of any analyst.

Mr. Rowen said he expects Google to continue posting “hyper-growth rates.”

For the fourth straight quarter, Google beat analyst earnings estimates. Excluding traffic acquisition costs, the company posted $890-million in net revenue, a 110-per-cent growth rate year-over-year. Analysts expected $842-million.

The news sparked a selling frenzy that slashed more than 10 per cent off Google's share price after hours. Company shares continued to lose value in early Friday trading, dropping more than 2.5 per cent to $305.76. At one point Thursday, the share price rose to a record high of $317.80 before closing at $306.37.

Mr. Rowen's price target is nearly quintuple Google's initial public offering price.

He said Google managed to improve its quarterly performance even though the second quarter is considered seasonally weak because internet usage and advertising dollars spent both drop.

See also TheGlobleandMail

posted by What I Write @ Article