June 20, 2012 / 1:08 PM / 6 years ago

Benchmark cuts Google target

(Reuters) - Benchmark Co cut its price target on Google Inc’s (GOOG.O) shares by $35 to $615 as it expects the No. 1 Web search engine’s second-quarter net revenue to miss analyst estimates.

The brokerage expects weak online advertising in Europe, decline in the euro currency and soft domestic search volume, especially in retail, to impact the Mountain View, California-based company’s revenue.

“Google derives 35 percent to 40 percent of its revenue from Europe and controls over 90 percent of the search market; we expect Europe will continue to drag down its revenue growth,” Benchmark said in a note to clients.

Analysts on average were expecting revenue of $8.40 billion for the three months ending June 30, according to Thomson Reuters I/B/E/S.

The company’s net revenue fell short of expectations in the first quarter. Its search ads, known as its cost-per-click, fell 12 percent in the quarter.

Second-quarter domestic online advertising market, though appears decent, could be showing initial signs of slowing as there is no increase in activity and advertisers remain cautious, the brokerage said, maintaining its “hold” rating on the stock.

Google’s shares were down nearly 1 percent in premarket trading on Wednesday. They closed at $581.53 on Tuesday on the Nasdaq.

Reporting by Eileen Anupa Soreng in Bangalore; Editing by Maju Samuel

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