Google Inc (NASDAQ:GOOG) cleared an important hurdle to a stock split this week, and in spite of past concerns about a split, investors seem to be looking past it—at least for now. Bank of America Merrill Lynch analysts Justin Post and Joyce Tran issued a report to investors reiterating their buy rating and $975 per share price objective on the stock. They also explained how they believe the search giant’s Enhanced Campaigns advertising platform will affect the company’s earnings per share and revenue.


Google’s Enhanced Campaigns

The transition to Google Inc (NASDAQ:GOOG)’s new Enhanced Campaigns platform is set to be finished in the next few days. They said this platform is important to investor sentiment surrounding the company’s stock, as well as acceleration of the company’s profit growth and multiple expansion.

They are estimating a 1 to 2 percent incremental revenue uplift in the second half of this year and also next year because of higher cost per clicks on tablets, which are coming through the Enhanced Campaigns platform. They also see a $1 per share annualized benefit to Google Inc (NASDAQ:GOOG)’s earnings per share. They note that this is only from tablets and that cost per clicks from smartphones could create an even bigger benefit for Google Inc (NASDAQGOOG).

The analysts point to early data points which seem to indicate that the transition to the new platform isn’t disruptive and that it is indeed driving higher cost per clicks. They said Enhanced Campaigns also appears to be pushing advertisers to optimize their mobile campaigns better.

Overlooking Google’s Possible Stock Split

The analysts also mention the possible stock split that has been mentioned recently, and they note that investors appear to be overlooking it, even though it will keep voting control with the company’s founders. As a result of this and the impact from Google’s Enhanced Campaigns, they reiterated their buy rating. Their $975 per share price objective is based on 19 x 2014 expected earnings per share of $50 or 17 x ex-interest earnings per share, plus $130 per share in cash.