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BofA/Merrill Lynch Downgrades Google (GOOG) (GOOGL) to Neutral

December 5, 2014 7:48 AM EST
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Price: $152.26 +0.21%

Rating Summary:
    41 Buy, 6 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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BofA/Merrill Lynch downgraded Google (NASDAQ: GOOG) (NASDAQ: GOOGL) from Buy to Neutral with a price target of $580.00 (from $600.00).

Analyst Justin Post cited: 1) lower than Street estimates (search maturity, lack of product catalysts, and margin pressure to investments in competitive and long-duration businesses like cloud computing and retail delivery); 2) increased regulatory risk, particularly in the EU; 3) strong Apple product cycle and search contract renewal uncertainty; and 4) competition (FB in ad networks, possibly search) and reversal of US online advertising market share gains due to social emergence (we estimate Google’s US market share will fall from 41% in 2013 to 40% in 2014E and 39% in 2015E)."

The firm is slightly lowering 2016 revenue/EPS to $73.72bn/$33.81 from $74.44/$34.15 (which is below Street at $73.40bn/$$35.77.

For an analyst ratings summary and ratings history on Google click here. For more ratings news on Google click here.

Shares of Google closed at $537.31 yesterday.



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