S&P Equity Research came out with a controversial downgrade of Google Inc. (NASDAQ: GOOG) last week. The equity research outfit cut the rating to “Sell” based upon the new outlook for the combination of Motorola Mobility Inc. (NYSE: MMI) and Google. The price target was cut down to $500 from $700 after the prior “Buy” rating was removed. This morning came news that S&P Equity Research was now changing that “Sell” rating to a mere “Hold” rating.
We won’t bother with the details of the old call as you can read it above at the link. What happened is that it only took six days for the call to reach its fruition. Google shares closed at $563.77 on the Friday before the Motorola deal was announced, then at $557.23 on Monday, and then down at $539.00 on Tuesday. Shares traded briefly under $495.00 earlier today after having closed at $490.92 on Friday.
$495 < $500… Mission Accomplished!
The good news is that S&P Equity Research did not press its bet and say that in the new market and in the new economic outlook that Google is worth even less than what it considered a week ago.
This hardly represents much of an upgrade. Still, at least one less “Sell” rating will be of comfort to the bulls.
Google shares are up 1.5% at $498.30 in mid-afternoon trading.
JON C. OGG
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