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Friday, October 20, 2006

Google's Higher Price Targets from the Street

Google (GOOG) is the talk of the financial community. Everyone was impressed and the calls were endless. It seemed worthwhile to update a consensus target after the spectacular report that has almost everyone cheering the stock.

Out of the 10 reports we picked through, almost all were positive. A new consensus price target on Google (GOOG) shares is now $552 on the street. It will actually be a little different than that because in 90 minutes with everything else we chose 10 reports to peruse. In fact the actual street consensus target may be a bit lower because many will not officially change a price target, and many do not have formal price targets. But you can see below by the firm names that these aren't just the boutique calls.

Jim Cramer on MAD MONEY was the first pundit to come out in favor of the stock. He even had "GOOG" written in a black marker on his forehead, and then did some math for $14.00 in 2007 earnings and a 40 P/E to take his $500 target up to $560.

Citigroup put its target at $600.

Goldman Sachs raised its target from $525 to $595.

Jefferies raised its target to $520.

Merrill Lynch now has a $530 target.

Oppenheimer has a $540 target.

Pacific Crest maintained its $500 target.

Piper Jaffray maintained an Outperform and $600 target.

RBC Capital maintained its outperform rating, but lifted the target to $525.

ThinkEquity has a $550 target.

Soleil was one of the few who didn't have the pom-poms out, because they noted the stock is priced to perfection and maintained a Hold rating.

We were asking how much better the company would have to post than expectations since everyone was so positive on GOOG ahead of the results. They did whatthey needed to and then some. As a reminder today is options expiration

There were 73,000 of the closest call options and 100,000 of the remaining active put contracts that were still in the October open interest today. In truth, many or most may pair off and most will just expire worthless; so it doesn't mean that you will get 17 million shares whipping around from options alone.

It should also be noted that most of the open-ended mutual funds have an October year-end, and many traders are betting that there will be continued fund buying with the company being a MUST OWN. There are still funds that didn't own it and many will want to show it on the books for the annual report.

Google is up 7% right at the open around $456. Its year high is $475.11.

Jon C. Ogg
October 20, 2006
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