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Alphabet Price Target Cut by SunTrust Analyst Over Pandemic's Impact on Ads

A SunTrust analyst cut his price target on Alphabet to $1,350 from $1,600, calling the coronavirus's impact on advertising "a shock to the system."

Alphabet's  (GOOGL) - Get Report price target was cut to $1,350 from $1,600 by an analyst from Suntrust Robinson Humphrey, who said the coronavirus pandemic's impact on advertising "is a shock to the system."

Shares of Google's parent at last check were up 1.5% at $1,118.13.

Analyst Youssef Squali said in a note to clients that the weaker ad environment is "likely to continue until a gradual recovery unfolds in fourth-quarter 2020." 

Squali also said “visibility into the exact timing for a bounce back remains murky.”

The analyst affirmed a buy rating on Alphabet, calling the Mountain View, Calif., search and tech company one of the safest platform bets for advertisers.

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The coronavirus has brought the economy to a standstill. 

The U.S. Labor Department reported on Thursday that jobless claims for the week ended March 21 tallied 3.28 million. Economists surveyed by Econoday had expected 1 million jobless claims for the week.

Earlier this month, Needham's Laura Martin wrote in a note that travel-related ads - the fourth-largest category of search ads - could take a hit as the virus continued to spread.

"Lower customer demand in travel verticals including flights, hotels, tours, etc., [is] lowering ad spending by travel-related companies in the current quarter, our channel checks indicate," she wrote.

Martin slashed Needham's revenue estimates by $1 billion for the March quarter and $3 billion for the June quarter as a result of travel-related impacts. 

In February, Alphabet reported fourth-quarter earnings of $15.35 a share on revenue of $46.08 billion. Analysts were expecting the company to report earnings of $12.53 a share on revenue of $46.94 billion.