FBN Slashes Price Target On Google

FBN Securities lowered its price target on Google Inc. GOOG from $750 to $650 in a report issued Monday.  The firm maintained an Outperform rating.

Analyst Shebly Sayrafi made the change in response to the company missing “consensus revenue and EPS driven primarily by a deceleration in Google Site Paid Click growth from 33 percent Y/Y in FQ2 to 24 percent Y/Y in FQ3.”

The report also noted that international growth is decelerating and the company is making large increases in R&D spending, hiring more engineers.

Google’s “standalone headcount of 51,564 grew by 22 percent Y/Y from 42, 162 the year before, so productivity declined Y/Y as hires were a bit higher than normal,” according to the report.

A bright spot in the report was that “other revenue totaled $1.841B, up 50 percent Y/Y, and is now 11 percent of revenue.”  This includes revenue from Google Play and Chromecast.

Sayrafi also saw positives in stabilizing CPCs, U.S growth and lower capex.

Google Inc. recently traded at $556.53, down 0.46 percent.