A $600 day as Web giant spreads wings
EmptyShares of Google on Monday passed the $600 mark for the first time, and Wall Street observers said $700 could well be the next milestone.
The gain for the seemingly unstoppable Internet bellwether came as The Hollywood Reporter Showbiz 50 stock index, which includes Google, hit a new high.
While Columbus Day meant that some on Wall Street were out of their offices and away from their trading desks, the index of key Showbiz stocks climbed 0.82%, or $10.76, to $1,318.01 after going as high as $1,318.20 intraday. It had just set a previous high for the year of $1,307.25 on Friday.
Google has seen its market value jump about 50% above its low for the past year.
Street folks have debated this year whether the stock could reach $600 without entering bubble territory, with many seemingly not concerned at all, which has led as of late to analysts raising their Google price targets well beyond that mark.
Google shares on Monday went as high as $610.26 before closing at $609.62, a 2.6% gain for the day. That left the stock up 32.4% year-to-date and about 50% above its 52-week low of $409.75.
Bear Stearns analyst Robert Peck on Friday reiterated his "outperform" rating on Google shares and set a $700 price target, predicting the firm should hit it by year-end 2008.
He cited growth opportunities in online search, potential revenue contribution from the company's online video juggernaut YouTube and Google's efforts in radio and print advertising.
"Google remains one of the best operating companies within our coverage universe, with (operating-cash-flow) and earnings-per-share growth estimated at 21% and 20%, respectively, over the next three to five years," Peck wrote in a report. He added that Google has been trading in line with its Web peers, "though Google's longer-term prospects are more favorable than several stocks."