NEW YORK (TheStreet) -- Shares of Google (GOOGL) are down 0.53% to $513.70 in pre-market trading after JP Morgan lowered the company's price target to $600 from $670 and lowered its 4Q14, 2015, and 2016 estimates, while maintaining an "overweight" rating.
"We are lowering our estimates on Google for 4Q14, 2015, and 2016 to account for slower organic growth, continued strength in the USD, and ongoing investment opportunities. Our 2015 revenue comes down by 4%, with about 75% of the change due to fundamentals and about 25% due to FX pressure," analysts said.
"Google shares have underperformed significantly YTD-down 8% vs. the S&P 500 up 8%-with key concerns focused around the transition from desktop to mobile search, continued margin compression, and increasing competition from Facebook," analysts continued.
"All of these factors contribute to the changes in our model and our non-GAAP EPS is now 5% below consensus for 2015 and 2016. However, we believe buy-side expectations are currently below sell-side estimates," analyst noted.
"Google shares currently trade at 15.1x our 2016E non-GAAP EPS of $34.05 and 7.5x our 2016E EBITDA of $34.9B. With 2014-2017 CAGRs for revenue and profits ranging between 15% to 17%, we believe current valuation remains attractive. And while there are no imminent signs, Google could also become more shareholder-friendly by levering up and returning cash to shareholders," analysts added.