Google Inc. was downgraded to neutral from buy at Bank of America Merrill Lynch on Friday, according to a note issued to clients Friday morning. Google faces competition from Apple Inc.'s new products, including the iPhone 6 and Apple Watch, the analysts said. It also is increasingly dealing with competition in the U.S. advertising market, particularly from Facebook Inc. . The analysts expect Google's share of the domestic advertising market to fall to 39% in 2015 from 41% last year. Increased regulatory risk, particularly in the European Union, where Google has faced privacy and antitrust scrutiny, was also a factor in the downgrade. Bank of America lowered its 2016 revenue and earnings per share estimates and reduced its price target to $580 from $600. Despite the challenges, Google's continued strengths are its search technology, Android, YouTube and roughly $59 billion in cash, the analysts said. Shares of Google fell 1.1% to $536.55 in premarket trade.
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