Google Shares Advance After 'Conviction Buy' Report

Thursday, 20 Aug 2009 | 1:15 PM ET

Google Inc. shares advanced Thursday after Goldman Sachs predicted accelerating sales growth for the Web search leader.

Analyst James Mitchell added the Mountain View, Calif.-based company to Goldman's "Conviction Buy" list in a note to investors late Wednesday.

An uptick in search ad spending in Europe, a growing share of the online display ad market and easier year-over-year comparisons should help Google in the coming quarters, Mitchell said.

The recession has not reversed Google's upward trajectory, but it has weighed on the company's revenue. For the April-June quarter, revenue was up just 3 percent over the previous year. Until the fourth quarter of 2008, the Google's revenue hadn't fallen below a 30 percent growth rate.

Mitchell said he expects growth to return to the high teens or better over the next year, a trend that should boost the company's stock. He raised his target price for shares to $560 from $510.

Shares of Google climbed $14.33, or 3.2 percent, to $458.30 in afternoon trading Thursday.

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