| Google Inc. shares fell in Thursday premarket trading after the online search engine leader's sharply higher fourth-quarter profit failed to impress investors. On Wednesday, Mountain View, Calif.-based Google reported adjusted profit of $3.18 per share, which topped analysts' expectations of $2.92 per share. Many analysts were upbeat on the company's prospects and several analysts, like Prudential Equity Group's Mark J. Rowen, raised their price targets. Rowen became the latest analyst to set a price target of $600 or above. "We believe the fourth-quarter results give us further evidence that growth is decelerating at a slower pace than what the market has priced into the stock, and that management is doing an excellent job of keeping the rate of expense growth below the rate of revenue growth," Rowen wrote in a client note. Rowen raised his price target to $600 from $575 and kept an "Overweight" rating on the shares. Merrill Lynch analyst Justin Post also raised his price target by $30 to $560, expecting the company to gain market share in 2007. "We believe Google will continue to take share in an attractive market, and the company's technology strengths will lead to new opportunities in traditional media, payment processing and on-demand software," Post wrote in a client note, while keeping a "Buy" rating on the stock. Lehman Brothers analyst Doug Anmuth kept an "Overweight" rating on the shares and expects the company to continue increasing search market share, while expanding into new products and other forms of media. Anmuth warned, however, investors may focus more on potential impacts of online payment service Checkout and other factors, despite fourth-quarter results. Although quarterly top-line growth was 20 percent, Anmuth said further gains were curbed by Checkout, a lower overall average cost-per-click during the quarter, and adverse seasonality of travel and finance verticals in the U.K. during the quarter. "We do believe that as Google grows, its business is becoming increasingly complex and there are more moving pieces impacting the model," Anmuth wrote in a client note. Google gave up $6.80 at $494.70 in premarket activity.
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