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Gene Munster Raises Google Price Target, Sees 15 percent Upside


Gene Munster, Senior Research Analyst at Piper Jaffray issued an analyst report on December 10.

In the report, the analyst increased the price target on Google (NASDAQ: GOOG) to a Street high of $1,263. The price target represents an approximate 15 percent upside from the December 10 opening price of $1,076.15.

The analyst performed a series of tests on Google Now, the company's answer to Apple's (NASDAQ: AAPL) Siri. “We highlight that Google Now has been gaining on Apple's Siri in terms of correct answers in the commerce and local categories,” the analyst wrote.

The analyst asked both Google Now and an Apple device equipped with Siri 400 questions both in doors and outdoors, in five different categories which included Local, Commerce, Navigation, Information and OS Commands.

The analyst concluded that Google Now and Siri are “comparable in terms of understanding the spoken queries and returning the correct result.”

Despite being on equal grounds in some categories, Google Now remains significantly weaker in OS commands, according to Munster. “For example, Siri enables full control of the music application via Siri, but Google Now does not understand all song change/pause commands,” Munster noted.

As Google continues to release more voice-compatible devices such as Google Glass, Moto X and Moto G, the OS Command performance should improve.

The analyst's price target of $1,263 is derived from a 21x multiple on its estimated CY15 PF EPS of $60.14. Shares were maintained with an Overweight rating.


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