What Problems at Google? Raised Estimates With $800 Target (GOOG)

The firm is raising estimates, expects strong demand in the first quarter and beyond, reiterated its “Buy” rating, and it has an $800 price target objective.

Canaccord Genuity calls Google Inc. (NASDAQ: GOOG) the best risk-reward out there in internet stocks and believes that earnings and revenues will be handily above estimates next week as traffic accelerated and improved monetization in its display business.  The firm noted, “We are raising our Q1/11, 2011, and 2012 sales estimates by $198 million, $1.1 billion, and $826 million… We are raising our Q1/11, 2011, and 2012 EPS estimates by a more modest $0.03, $0.09, and $0.15 (to EPS).”  Another boost is coming from what it believes is 22% YouTube growth in the first quarter with YouTube now representing 26% of pageviews.

Risks do include the fresh management changes, regulatory scrutiny, and spending hikes.  Still, its growth opportunities outweight its concerns. The firm noted that the numbers today reflect only a 14-times 2012 EPS versus 19.7-times for its peer group.

Google is up about 1% at $580.26 this morning after the call and the 52-week trading range is $433.63 to $642.96.

JON C. OGG