April 19 Google Inc's share price
should resume its upward march to about $900 from less than $800
now, analysts said on Friday, after the search giant's strong
quarterly profit reinforced its status as a technology sector
At least five analysts increased their 12-month price target
on the stock, by between $50 and $130 to $820-$925. Three
others, who already had targets above $935, trimmed theirs.
Some analysts said the predictability of Google's results
over the last several quarters was allowing them to better model
earnings and stock price trends.
The strength of Google's core search business, which lends
stability to its overall results, will also help it fund
projects such as Google Glass wearable computers and high-speed
fiber networks as the company seeks newer streams of revenue,
some analysts said.
Google shares peaked at $844 in March but have slipped since
then because of uncertainty about the company's mobile
advertising business and its Motorola mobile division.
Still, some analysts have said they expect the stock to hit
Google shares were set to open around $772 on Friday, up
less than 1 percent. Google reported stronger-than-expected
earnings after the market closed on Thursday.
"Google can grow its core search business in the low teens
over the next few years at high incremental margins," analysts
at Morgan Stanley said. "(It) may therefore be able to invest in
newer projects while keeping core operating margins about
The decline in Google's cost-per-click also slowed in the
first quarter from the fourth quarter. Cost-per-click, or the
rate advertisers pay Google, has been hit by lower advertising
rates on cellphones over the past few quarters.
Google recently changed the way marketers run ad campaigns
on its website -- a strategy it calls Enhanced Campaigns --
blurring the distinction between ads for PCs and mobile devices.
Some analysts believe this could help boost Google's overall
"Mixed trends could lead to diverging views on Google coming
out of the quarter, but we'd be buying any weakness in Google
shares," JP Morgan analysts said.
"We remain positive on Google as mobile and display,
Enhanced Campaigns, and Google Shopping/Play Store App should
drive strong year-over-year growth in the second half of 2013
and into 2014."
JP Morgan maintained its price target at $860, with an
Macquarie Equities Research raised its price target to $925
from $795, while Oppenheimer, which had the lowest stock price
target of the group, raised its target to $820 from $765.
Citigroup and Needham and Co also forecast that Google
shares would breach $900. Piper Jaffray, Evercore Partners and
Deutsche Bank, which had targets above $935, trimmed theirs
slightly. All these brokerages maintained their "buy" or