Google (NASDAQ:GOOG): Added to Piper Jaffray Alpha List with a $785 tgt
Source: http://notablecalls.blogspot.com/2008/09/google-nasdaqgoog-added-to-piper.htmlPosted on Tuesday, September 9th, 2008 | In Market Commentary
There are two specific potential catalysts for the back half that encouraged them to add Google to the Alpha List:
1. September Quarter Expectations. Firm does not think that the September quarter will be as bad investors think (shares are down 18% in the last three weeks). While they are slightly reducing numbers, we expect the company to meet Street estimates for September, based on their belief that concerns over slowing organic UK growth, are overblown. A 10% miss in estimated UK organic growth equates to a 0.7% revenue miss and a 1% EPS miss to Google’s overall numbers.
2. Increased Search Ad Market Share. Google has stated it expects the Yahoo! search deal to begin in October. We estimate the Yahoo! deal should add 12% to Google U.S. search ad market share, which PJ believes would bring Google to over 80% U.S. search ad market share. They believe it to ultimately pass DOJ scrutiny.
Historic Q4 Stock Strength. Firm notes that over the last three years, Google has returned an average of 30% from September 9 to December 31 (a range of 22% to 45%). If the stock were to perform in line with this historical trend, it would mean a share price of around $550 by year end.
Notablecalls: I think GOOG will at least bounce on this call. Gene Munster has been and continues to be the Axe in the space.
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Gene Munster, google, Google U.S., Market Commentary, Piper Jaffray, Search Ad Market Share, search deal, United Kingdom, United States, USD, Yahoo
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