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Cramer’s New Price Target for Google

On Nov. 9, Cramer announced that Google was going to $700 a share. However, the stock hasn’t yet broken through the $600 level, which is where some investors have been taking profits. That doesn’t mean the Mad Money host was wrong, though. GOOG may have doubled from its early March lows, he said, but the run isn’t over.

Cramer’s new price target for Google ? $750.

That’s what one of his favorite technical analysts predicts, and Cramer during Tuesday’s show said that the fundamentals back it up.

GOOG’s $600 ceiling will soon become its floor, the technician said, and the stock will climb back to near its all-time high of $750. That will be the next level at which investors take profits.

Google’s a better company now than it was back in 2007, Cramer said, when it reached that all-time high. He thinks next year’s earnings could come in at $27 a share, and he sees no problem with putting a 27 or 28 price-to-earnings multiple on a stock with a 21% long-term growth rate. If earnings times multiple equals price, then GOOG should hit $750.

Cramer likes Google largely for its exposure to advertising, especially online. The company right now is benefiting from both a rise in ad spending as the economy recovers and the migration of ad dollars from TV, radio and print to the Internet. Google, its search engine controlling a 67% worldwide market share, is uniquely situated to gain here. Plus, management is constantly looking for new revenue streams, as indicated by its purchase of YouTube and the announcement of its potential Apple iPhone-killer handset, the Nexus.

“This stock, my friends, is a juggernaut,” Cramer said of Google, “and you want to buy it while it's taking a little breather – before the next leg of the rally begins.”

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