Akamai: Merrill Downgrades on Competitive Issues

January 16, 2009 at 5:32 am PT

Akamai (AKAM) shares are trading lower this morning after Merrill Lynch analyst Garrett Bekker cut his rating on the stock to Neutral from Buy. His price target drops to $15, from $16.

Bekker writes in a research note this morning that he expects “competitive challenges and spending headwinds to persist in 2009,” offsetting growing contributions from premium services and international expansion. He says the stock’s valuation appears reasonable, but that there are “few catalysts on the horizon.”

Bekkar also notes that he is concerned that growth in its e-commerce segment, which accounts or just over a quarter of revenue, could decelerate given eroding online spending trends.

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