RBC Capital downgrades Google (GOOG) to sector perform from top pick.
Analyst Jordan Rohan says mid-quarter channel checks confirm double-digit percentage sequential decrease in pricing across the domestic Google network, with volume up slightly from the fourth quarter.
He believes this significant (negative) inflection point after phenomenal fourth-quarter. He notes one area of softness is retail and e-commerce, as traditional retailers "reset their max bids" to more rational levels after experimenting in the fourth quarter.
Rohan cuts his $729 million first-quarter revenue estimate to $686 million. He cuts his $4.20 2005 earnings per share estimate to $3.92 and $5.20 2006 to $4.94. He cuts his $250 target to $200.