Shares of Google and Yahoo went down after an analyst cut his price targets on each of them.
According to TheGlobeAndMail.com, Jordan Rohan, an analyst with RBC Capital Markets, dropped his Google rating from “top pick” to “sector perform” and cut his 12-month price target from $250 to $200. He also slashed his Yahoo stock rating to “sector perform” from “outperform” and lowered its 12-month target from $43 to $34.
“We had hoped that momentum in paid search from the fourth quarter would carry through to first-quarter results,” said Rohan. “But now we believe otherwise.”
From ZDNET:
Rohan, citing checks with the companies’ channels for selling online ads, downgraded Yahoo to the equivalent of a “hold” from a “buy.” And he downgraded Google to the equivalent of a “hold” from a “strong buy.”
In the case of Google, Rohan projected the company would increase its first-quarter revenue 5 percent from the previous quarter, rather than the 13 percent jump he previously forecast. Wall Street expects the company to generate a 13 percent increase.
Rohan says that Yahoo’s more diverse business mix will help it fare better than Google.
Shares of many of the two companies’ competitors have suffered as well.
From BusinessWeek:
Shares of both companies fell, dragging competitors Ask Jeeves Inc., Mamma.com Inc., FindWhat.com Inc., and LookSmart Ltd. down as well. Google shares tumbled $5.06, or 2.6 percent, to close at $188.89, and lost an additional 34 cents recently in the extended session. Yahoo fell 64 cents, or 2 percent, to close at $31.48, and fell 7 cents in recent after-hours trading. Ask Jeeves fell $1.48, or 6.4 percent, to close at $21.77, and dropped 5 cents after the bell. Mamma.com declined 20 cents, or 5.3 percent, to $3.55 at the close and shed 3 cents recently after-hours. Shares of FindWhat.com fell $2.50, or 18.6 percent, to close at $10.95, and fell 7 cents in extended trade. LookSmart fell 6 cents, or 5.9 percent, to close at 96 cents. All trade on the Nasdaq.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
