Google Inc. (NASDAQ: GOOG) is still watched by just about every trader under the sun. This morning we have two analyst research calls that differ greatly. There is a raised price target and a formal downgrade.
Boutique research firm Benchmark has cut its rating to “Hold” from “Buy” this morning. The issue with the firm is channel checks are indicating that online advertising trends are softening. The target on the stock is $430.00, which is apparently the same as before.
Susquehanna is the positive call . It is maintaining a “Positive” call, but raised the price target by 10% to $555.00 from $505.00. Its rationale is the stabilization of search.
For our own take, we continue to worry about the peak of search as far as how much market share that Google can hold. It keeps creeping up, but there are enough techs and alternative users out there that no one will get 100% share. As far as online ad trends, this has stabilized from the mudslides we kept seeing from December to March. April looked to be the bottom, May marked an improvement, and June has been a bit spotty but only a week of data.
Google shares are down almost 1% just above the $440.00 level. If Benchmark is right, then Google’s share price has peaked and has to sell off. If Susquehanna is right, then 2009’s remained of the year will be a fun year for tech and internet investors.
Jon C. Ogg
June 8, 2009
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