UPDATE: Morgan Stanley Maintains Overweight on Google After Nest Labs Acquisition

In a report published Tuesday, Morgan Stanley analyst Scott Devitt maintained an Overweight rating on Google, Inc.

, with a price target of $1,172.00. According to the report, GOOG has agreed to acquire Nest Labs, a designer of “smart” internet-connected home thermostats and smoke detectors, for $3.2B in cash, or 6 percent of GOOG's cash balance at the end of 3Q2013. GOOG may see Nest appliances as a convenient way to bring GOOG home automation to the mass market. “In 2009, Google launched PowerMeter, software that allowed consumers to track home energy usage; Google retired the project in 2011 due to difficulty signing up partners,” the report said. “More recently, Google launched EnergySense to promote “smart” thermostats produced by other manufacturers. Google has invested in a range of alternative power sources (solar, wind, hydroelectric), and has stated that households may be able to save 10-15% on home energy costs by monitoring and adjusting usage. While a Nest acquisition is unlikely to be purely altruistic, it does mirror Google's corporate orientation toward resource conservation.” GOOG closed Monday at $1,122.98.