| Forecast on Search Engine Google Shares: "Notably Risky" |
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Scott Kessler, an analyst from Standard & Poor’s Equity Research,
has maintained a hold rating on search engine giant Google and raised
the company’s target price. However, the lowered 2006 earnings estimate
will be seen after the accounting for the projected stock options
expense.
Kessler, who based his decision on Google’s lower weighted-average cost of capital projection and using the 2006 forecasts, he has raised his target price on Google to US$428 from US$364. On the other hand, he lowered his 2006 fiscal earnings per share estimate for Google to US$7.62 to US$8.09. Kessler and other analysts estimate that Google’s 2006 P/E as comparable to peers and its P/E-to-growth multiple at 28 percent below peers, have factored into their target price. According to Kessler, he thinks that the Google stock has notable risks, due to recent significant appreciation, its lack of revenue diversification on online research and Google’s competition in the industry. By Paulene Calinawan |
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