Analysts Remain Bullish On Google Ahead Of Q4 Earnings
Google did not have the best year in 2014, and has fallen short of earnings expectations in four consecutive quarters. Google shares have dropped 15 percent over the past six months as a result.
One reason for this is due to the hit Google’s Android took after Apple Inc. (NASDAQ: AAPL)'s iPhone 6 and iPhone 6 Plus saw huge success this fall. Google’s search engine also took a hit in November when Firefox's browser replaced Google with Yahoo! Inc. (NASDAQ: YHOO) as its default search engine.
Investors are concerned that Google may face this issue again, as the company’s search engine contract with Apple’s Mobile Safari browser will end in 2015.
Despite the negative rumors, it is being speculated that Google could end up with over $80 billion in cash and marketable securities by the end of 2015, thus beginning a new dividend plan for investors.
Google is expected to report its Q4FY14 earnings on January 29 after market close.
SunTrust analyst Robert Peck weighed in on Google on January 14, maintaining a Buy rating on the stock.
Looking on the bright side, the analyst noted: “One potential catalyst if growth is slowing [is] a dividend program.” Peck believes this and other factors could be “potential positive surprises” that are getting overlooked because “Investors are focused on potential negative surprises.”
In addition, Peck believes Google’s stock price valuation conveys that shares could increase 10 percent.
Overall, Robert Peck has a 46 percent success rate recommending stocks and a +7.3 percent average return per recommendation.
Pivotal Research analyst Brian Wieser also rated Google on January 14, reiterating a Buy and cutting his price target from $620 to $610.
Wieser noted: “Many of the negative considerations we have been focused on – including compressing margins, investment of capital away from the company’s core competencies and government relations among others – have become more widely held among the investment community and make Google attractive at current price levels.”
Brian Wieser has an overall success rate of 77 percent recommending stocks and a +20.6 percent average return per recommendation.
Separately on January 14, Credit Suisse analyst Stephen Ju reiterated an Outperform rating on Google, but cut his price target from $722 to $700.
The analyst wrote: “Going in 4Q14 earnings, we have updated our thoughts on Google Play and on Google’s advertising business following our quarterly channel checks, and have elected to take a harder look at our estimates for each of Google’s businesses as we revisit our product-by-product revenue build-out. In summary, we have taken a more conservative stance on Search both O&O and Network, increased R&D as well as CapEx, and have rolled through updated foreign exchange rates in a bid to derisk our projections.”
Overall, Stephen Ju has a 54 percent success rate recommending stocks and a +12.3 percent average return per recommendation.
On average, the top analyst consensus for Google on TipRanks is Moderate Buy.
Latest Ratings for GOOG
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