UPDATE: BMO Capital Markets Downgrades Google to Market Perform, Reiterates $790 PT

In a report published Monday, BMO Capital Markets downgraded its rating on Google GOOG from Outperform to Market Perform, and reiterated its $790.00 price target. BMO Capital Markets noted, “GOOG is up 39% since June 14, 2012 versus the S&P 500's 14% gain since then. Over that time, we have consistently viewed (and continue to view) Google as a company that can grow revenue 15%-20% over the next three to five years, with margins slowly eroding (though not as much as in 2012 when Motorola entered the equation) and no share buyback or below-the-line actions to accelerate EPS growth. At the same time, investor sentiment has changed materially. Since mid-June, GOOG has climbed a ‘wall of worry' as the market becomes comfortable with cost-per-click declines (and Motorola) and the stock's forward non-GAAP P/E multiple has moved from ~12x to 17x. This makes it a less compelling opportunity for value investors, and we also believe the benefit of growth investors rotating out of AAPL in recent months could begin to abate. Besides a pullback in the shares, we would look to get proactive again if 1) new Motorola products are greeted positively after Google works through the 12-18 month backlog it inherited (potentially in 2H13); 2) we see more dynamic YouTube monetization, or; 3) a return of capital to shareholders, though we continue to view this as very unlikely.” Google closed on Friday at $775.60.