Prudential analyst Mark Rowen gave Google’s stock a price target today of $400. If you were wondering why Google’s stock has rebounded …
… back up over $300 despite market panic over a three-cent miss in its earnings report, that’s the reason.
From The Globe and Mail:
While investors were busy unloading Google Inc.’s stock after the company warned Thursday of slowing third-quarter sales growth, Prudential Equity Group LLC analyst Mark Rowen went the other way, raising his price target for the world’s biggest media company to $400 (U.S.), the highest of any analyst.
For the fourth straight quarter, Google beat analyst earnings estimates. Excluding traffic acquisition costs, the company posted $890-million in net revenue, a 110-per-cent growth rate year-over-year. Analysts expected $842-million.
However, even though the company doesn’t issue financial guidance, Google executives warned in a conference call that third-quarter sales growth may slow due to seasonal weakness. The third quarter is considered the weakest for advertising sales.
The news sparked a selling frenzy that slashed more than 10 per cent off Google’s share price after hours. Company shares continued to lose value in Friday trading, dropping more than 3.6 per cent to $302.40. At one point Thursday, the share price rose to a record high of $317.80 before closing at $306.37.
Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search engines.
Visit the InsideGoogle blog.
