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Criteo stock slips again after KeyBanc, SunTrust downgrades

Emily Bary

Shares of Criteo SA are down 3.5% in premarket trading Tuesday after analysts at KeyBanc Capital Markets and SunTrust Robinson Humphrey cut their ratings on the stock, citing a report from AdWeek that suggested Alphabet Inc.'s Google might be considering changes to the targeting policies around its browser. "Incentives and anti-trust issues make a full [Intelligent Tracking Prevention]-like solution in Chrome very unlikely, in our view," wrote KeyBanc's Andy Hargreaves, referring to an Apple Inc. program that works similarly. "However, we will not be able to disprove the bear case until Google provides more clarity on its plans, which is likely to create an overhang on CRTO that we do not expect to ease in the near term." Hargreaves lowered his rating on the stock to sector weight from overweight. "Restriction to third-party tracking in Chrome could cause massive disruption to Criteo and the digital ad industry," he said. SunTrust's Matthew Thornton downgraded the stock to hold from buy and cut his price target to $24 from $32. He cited "uncertainty" around Google's plans and said that Chrome may account for half of Criteo's revenue, according to his estimates. "Thus the loss of targeting users on Chrome would likely have severe consequences and, in addition, could trigger the remaining browsers (e.g. IE/Edge, Opera) to follow suit (could push exposed revenue to 55%-60% of total by our estimate)," he wrote. Shares are down 5.8% over the past three months, while the S&P 500 has gained 13%.