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Raymond James & Associates analysts Aaron Kessler, Shyam Patil, and Kurt Batinich have revised their price target on Google Inc (NASDAQ:GOOG) stock from $730 to $835, ahead of the search engine giant’s Q3 earnings announcement. The equity research analysts expect Google Inc (NASDAQ:GOOG) to report solid, though in line with Q3 results on Thursday 18th October.

However, the analysts also point out that search spending growth slowed modestly in 3Q (tougher comps and EMEA softness), although they still maintain their outperform rating on the tech giant. The analysts also outline that the upcoming holiday season is likely to boost the company’s 2012 earnings, with potential for upside from Product Listing Ads conversion.

Raymond James & Associates have increased their Q3 estimates for Google Inc (NASDAQ:GOOG) revenue from $11.48 billion to 411.52 billion, representing 0.3% increment from their previous estimates. EBITDA estimates are also up by 0.6% to ~$4.92 billion, as compared to the initial ~$4.89 billion, while estimated non-GAAP EPS is up 2.2% from the initial estimate of $10.24 per share to $10.46. Nonetheless, this still falls below the consensus estimate of $10.63 non-GAAP earnings per share.

The full year estimate for revenue was also up 0.3%,  to $42.45 billion, while Q4 estimates have been increased by 0.8%. However, EBITDA estimate for the full year 2012, is down 0.2%, following a cut-down for Q4, which has been revised downwards by -1.1%, from ~$5.64 billion, to ~$5.58 billion.

Full year 2013 revenue has a new estimate of $54.02 billion, up from $53.59 billion, or a 0.8% increase, and the analysts also reviewed the EBITDA by the same margin to $23.214 billion, while non-GAAP EPS has been increased by 1.4% to $49.12 per share.

Key Business Segments Performance

Overall, Raymond James analysts are predicting a reduced growth in Google’s key business segment, the search engine marketing, following a slowdown in paid search spending for Q3, given tougher comps (strong growth in 3Q11) and continued slowness in EMEA. Additionally, the analysts note that most SEMS indicated a slowdown in clicks in 3Q and bottoming of CPC pricing (largely due to changes Google made in 3Q11).

The biggest challenge facing SEMs has been monetization of traffic, and Google, despite doing exemplary well compared to its major competitors, still faces an uphill task toward turning its traffic, effectively into revenue.

Notwithstanding, consumer survey is backing Google Inc (NASDAQ:GOOG) prospects in regard to customer usage.

Despite registering a slight drop in the customers’ Google  usage plans, 24% of users indicated that they would increase their usage of the search engine giant, with only 1% expressing that they are likely to decrease. On the other hand, 74% seemed satisfied with their current levels of usage, similar to June 30 survey results.

The company’s search sites still hold the lion’s share of the market with 66.6%, as compared to closest rival Microsoft Corporation (NASDAQ:MSFT), believed to hold 15.8%. Yahoo! Inc. (NASDAQ:YHOO) sites,  hold 12.6%, sealing the pool of the dominant three.

According to ComScore statistics on search growth, Google search sites grew by a meagre 1.9% during the Q3, as compared to AOL at 13%, Ask network with 10.1%, and Microsoft sites, 7.7%, while Yahoo! sites slumped by 21.1%. In overall, search business declined by a weighted average of 0.5%.

At the time of this writing, Google Inc (NASDAQ:GOOG) stock was trading at $753.95 per share, up $9.25, or 1.24% rise from yesterday’s close.