Google Inc (NASDAQ:GOOG) Extends Fall For Third Session

Google Inc (NASDAQ:GOOG) Extends Fall For Third Session

Google Inc (NASDAQ:GOOG) turned lower in late morning session after early gains and the stock was recently trading lower by 0.16% to $559.82, off session high of $566.60.

This morning Morgan Stanley’s Scott Devitt started coverage on the stock with an Equal Weight rating and set a price target of $625, citing some of the same mobile computing concerns that have bedeviled Facebook (NASDAQ:FB) in recent weeks.

He noted” Despite attractive valuation, we remain concerned that profit contributions from mobile ads may continue below desktop levels due to TAC payments and lower pricing, and that competition from social destinations may intensify.”

Devitt is projecting $8.3 billion in revenue in the Q2 ending this month, and $4.5 billion in adjusted Ebitda, and $9.80 per share in profit.

His “base case” for the stock assumes revenue growth, compounded annually, of 10% through 2016, and paid-click growth of 11%. But he also has a “bull case” scenario in which the company could deliver 12% revenue growth on 12% click growth. That would give the stock a value of $784, he asserts.

Worries about how to monetize mobile advertising have dogged shares of Facebook almost since the company came public on May 18th. A report last Friday by Victor Anthony of Topeka Capital Markets sought to defend Facebook on that score, stating that it may win the battle for mobile, not Google.

Google Inc. is keeping tight-lipped about any planned announcements at its annual I/O conference to be held in San Francisco this week, as rumors speculate the company may unveil the first Google-branded tablet, the Mercury News reports.