Bank of America has slashed Google’s target price by 23% due to a large reduction in online shopping searches. The credit crunch crisis, and resulting recession, has meant that people are restricting their online spending. Brian Pitz, and analyst for Bank of America in New York advised clients that he was down valuing Google due to a reduction in predicted earnings for this quarter and all of next year.
Google’s CEO Eric Schmidt, has made the decision to cut back on hiring, and is no longer recruiting contractors, to help cut staffing costs.
“We see consumers still searching online, but for news and political commentary rather than HDTVs, Blu-Ray players and PCs,” Brian Pitz, Bank of America.
Profits are estimated to be $3.97 a share this quarter, rather than the $4.47 originally forecast. Next year profits have been estimated at $18.21 a share, down from $19.57.
Google’s stock price fell $5.80 (2.1%), to $269.31 at 9:43 a.m. New York time in Nasdaq Stock Market trading. Its share price has crashed by 62% this year.
