Analysts bet on Google's new businesses, CEO Page
Analysts took a bullish stance on Google after the Internet search giant reshuffled its top deck, and said there is more room for the stock to grow as the company's bets on video, mobile and display advertising pay off.
January 22, 2011 / 13:29 IST
Analysts took a bullish stance on Google after the Internet search giant reshuffled its top deck, and said there is more room for the stock to grow as the company's bets on video, mobile and display advertising pay off.
At least twelve brokerages raised their price targets on the stock as shares rose 2.2% to USD 640.70 in pre-market trade.Starting April, co-founder Larry Page will take over as Google's chief executive, a move expected to add agility as the company pushes into newer businesses and battles against rival Facebook in the social networking space. "It is important to note that although the titles have changed, the core team remains the same... this new team structure makes a lot of sense and could result in faster decision making," JP Morgan analysts led by Imran Khan said.Some analysts believe that Google's stock could gain another 20 percent from current levels.Brokerage UBS said it was bullish on Google's long-term prospects and expects the company's focus on its emerging display network business, YouTube, Android and enterprise customers to deliver healthy returns in 2011.Fourth-quarter operating margins were slightly weaker than expected at 53% on higher sales and marketing expenses.JP Morgan's Khan, who lowered his 2011 operating margin estimates by less than a percentage point to 52.4%, said the expenses are necessary to promote future growth.Evercore Partners, however, said it was still concerned about Facebook's present growth trajectory and deepening integration with third party sites.Investors have speculated that Facebook could cut into Google's business if advertisers shift to the social network.Shares of the Mountain View, California-based Google closed at USD 626.77 on Thursday on Nasdaq. They have risen 16% since Google reported third-quarter results mid-October and are up almost 45% from its 52-week low of USD 433.63 touched in July 2010. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
