Goldman Sachs is making a ratings change on Google (NASDAQ: GOOG) this morning. Google has been removed from the Goldman Sachs Technology Framework Favorite Growth List after seeing shares drop some 14.1% since being added to the list on January 18, 2008 (compared to up 5.3% for the S&P 500 Index). The stock is also being removed from the Goldman Sachs Conviction Buy List due to underperformance to date.
Goldman Sachs notes that there is no official ratings change as there is no change to its Buy rating on the stock. This notes a belief that the recent drop is due to concern over its potential exposure to a macroeconomic slowdown. Goldman remains positive with a compelling valuation even after it lowered estimates ahead. The firm also noted that Google can maintain approximately 20% revenue earnings growth from 2009 to 2012.
This technology list has some stop loss features that trigger removals. Goldman Sachs’ 2008 year-end price target is $700.00.
Jon C. Ogg
February 4, 2008