What 5 Of Wall Street's Top Analysts Are Saying About Google

Five of Wall Street's best analysts commented on Google Inc GOOG GOOGL after it missed expectations for revenue and earnings in its Q4 report.

Shares of GOOG have fallen from the $540 level on January 23, but were showing signs of strength in Friday’s premarket, trading at $517.18, up 1.28 percent from Thursday's close.

Below are highlights from the analysts along with current ratings and price targets.

Morgan Stanley - Equal-Weight, $565 Price Target

“Our EW thesis on GOOGL is based on expectations that we believe are overly optimistic given 1) maturing desktop search, 2) margin pressure from lower margin but faster growing revenue streams, and 3) FX. This quarter reinforced this thesis and we expect estimates to come down, and while shares are not expensive relative to top line growth or historical levels, we remain EW until valuation comes in further or we see a path towards higher growth and/or moderating investment levels.”

Related Link: What Some Of The Big Boys Are Saying About Amazon

Credit Suisse - Outperform, $700 Price Target

“[T]his is the second quarter in a row in which we are seeing signs the CapEx step up is starting to slow down and serves as a confirmatory data point toward our investment thesis that Google is approaching a harvest cycle following what has now been a multi-year period of investment as Google looks to onboard the next wave of users in less developed markets as well as roll out its next set of products. Nearer-term, as we look across Google’s broad portfolio of emerging businesses we are paying particular attention to its quickly growing Play and Display businesses to provide the next leg of revenue growth.”

Citi - Buy, $629 Price Target (Cut From $652)

“FX was and will remain a significant headwind for the foreseeable future and the P&L was impacted by a large number of unusual charges that weighed on profitability.” The firm lowered estimates to account for FX headwinds expected to intensify in 2015. “For 1Q15 we model gross revenue, EBITDA, and EPS of $17.3bn, $6.5bn, and $6.42 vs. $18.2bn, $7.1bn, and $6.93 prior. For CY15 we look for gross revenue of $74.4bn (down from $77.6bn), EBITDA of $29.1bn (vs. $30.7bn prior), and EPS of $28.87 (vs. $29.71 previously).”

Wedbush - Neutral, $530 Price Target

“Positives. 1) Management seemed to be messaging that Google will be disciplined around future spending growth. 2) Network CPCs returned to positive growth for the first time in 2 years due to cleanup efforts, which translated into a better user experience and higher pricing. 3) UK revenue accelerated modestly sequentially on a FX neutral basis after decelerating meaningfully last quarter.”

SunTrust - Buy, $675 Price Target

“Ex-currency, revenue was slightly better than consensus despite some sourcing constraints in the hardware business. Gross revenue grew 18 percent ex currency, down from 20 percent last quarter though on a 3 point tougher comp, and operating income was at least in-line excluding >$300M in nonrecurring spend. Net-net, a noisy but solid quarter and certainly better than feared. We maintain our Buy rating and $675 target as we continue view risk-reward as favorable.”