Analysts to Google: You're So Money and You Don't Even Know It!
Bear Stearns Internet analyst Robert Peck is apparently taking the same cold medicines former Wall Street analyst Henry Blodget favors, just not in the same massive quantities.
Earlier this week Blodget–who in 2006 was laying out scenarios for a massive contraction in Google’s price–suggested the company’s shares might someday trade at $2,000. “Remember a couple years back when some analyst floated the idea that Google could eventually be worth $2,000 a share–and was ridiculed from coast to coast?” Blodget wrote. “Well, first it’s worth noting that Google is now almost a third of the way there. Second, it’s worth noting that $2,000 a share would mean a market cap of about $750 billion, which–given a reasonable time horizon–just isn’t that far-fetched.”
Well, according to Peck, Google will soon be just $1,300 from that stratospheric valuation. This morning he set a $700 target on Google shares for year-end 2008. “Google remains one of the best operating companies within our coverage universe, with EBITDA and EPS growth estimated at 21% and 20%, respectively, over the next three to five years,” Peck wrote in a research note to investors. “Google continues to gain market in search queries while continuing to face a bevy of competitors. … Further, Google’s efforts in online video, radio and print have added a layer of value that is absent from its competitors’ portfolio of offerings and which has the potential to yield significant financial rewards.”