BGC Financial Reiterates Hold Rating, $760 PT on Google on Earnings Preview

In a report published Wednesday, BGC Financial analyst Colin W. Gillis reiterated a Hold rating and $760.00 price target on Google GOOG. In the report, Gillis noted, “We wrestled with changing our rating to a more positive stance to take advantage of the recent weakness in the stock, but ultimately decided to revisit our rating later this spring. Historically the March quarter results have started Google's stock on a downward decline exceeding ten percent in each of the last three March quarters. Google's shares have already declined over 5% from its recent high of $838.60 on March 5th, and there are plenty of reasons to want to invest in Google. The company arguably produces the best software in the space, there are exciting new projects such as Glass and Fiber that could become meaningful revenue streams over time, and the recent merger of Android and Chrome leadership under Sundar Pichai could assist in reflecting Android's tremendous success onto Chromebooks. The core search business faces limited competition. It's possible no additional pullback in the stock materializes if investors continue to show enthusiasm for an improving trend in click prices (we model a 1% decline YoY), and excitement builds for the positive impact to click prices from the Enhanced Campaigns that forces advertisers to bid on mobile (and likely raises pricing). That said, Google tends to be a stronger stock in the back half of the year as the company benefits from the increased spending associated with back to school and holiday shopping.” Google closed on Tuesday at $792.50.