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Alphabet, Facebook Shares Decline On Citi Rating Downgrade Over Ad Revenue Growth Concerns: Bloomberg

05/10/2021 14:23
  • Digital advertising companies like Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and Facebook Inc’s (NASDAQ: FB) shares dropped on rating downgrade by Citigroup Inc (NYSE: C) from buy to neutral over the decline in ad budgets, Bloomberg reports.
  • Citi gave Facebook A $320 PRICE TARGET and Alphabet A $2,415 PRICE TARGET.
  • Interestingly, both the companies had beat the Q1 analyst consensus.
  • Citi expects a deceleration in the pandemic-induced growth in the last two quarters, jeopardizing the stock multiples.
  • Citi reiterated neutral ratings on both Pinterest Inc (NYSE: PINS) and Twitter Inc (NYSE: TWTR), while Snap Inc (NYSE: SNAP) got a sell rating. 
  • Roku Inc (NASDAQ: ROKU) was the only digital-ad stock that got a buy rating due to growth prospects associated with the budding connected TV market.
  • Bloomberg’s average analyst price target implies an upside of over 20% for Alphabet and 25% for Facebook.
  • Last week, Bloomberg had projected an over 30% Facebook core mobile-ad business growth despite competition in the second half.
  • Price action: GOOG shares traded lower by 2.31% at $2,343.18, and FB shares traded lower by 4.40% at $305.43 on the last check Monday.