Benzinga | May 10, 2021 02:23PM EDT

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

* 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.