Barclays Initiates Coverage on Google

Shares of Google, Inc. GOOG are trading up ~0.4 percent in the pre-market following an Overweight initiation and the announcement of a $650 price target at Barclays. Looking at the internet sector as a whole, the analysts at Barclays provided the following list of themes which they believe will be the main drivers of growth.

1. Increased buying power of the digital generation
2. Identification and personalization - knowing who and where you are, as well as what you like to do
3. Search and email will remain a large factor
4. Power of scale - dominance created by the 'network effect'
5. New conglomerates emerging
6. Monetization outside the U.S.
7. Becoming embedded in daily behavior
8. Privacy and security

Analysts at Barclays wrote, "Google benefits from the majority of our themes, in our view, and with a reasonable valuation on both P/E and FCF, we see it as a core holding for the next few years."