Analyst: Criteo Shares Could Be Headed To The Teens If GDPR Implementation Is Negative

Criteo SA (ADR) CRTO’s in a rough patch. The stock has fallen 51 percent over the last six months, and its potential recovery or continued decline seems to hinge on a single factor, according to one analyst.

The Rating

BMO Capital Markets analyst Daniel Salmon downgraded Criteo to Market Perform and lowered his price target from $30 to $26.

The Thesis

The downgrade was primarily driven by lack of visibility on the General Data Protection Regulation (GDPR) that will govern the use of consumer data in Europe starting in May.

“We materially underestimated the impact of Apple’s ITP and after several weeks of heavy focus on conversations with industry contacts, we can’t ignore the consistent caution about the potential impact of GDPR,” Salmon wrote in a Tuesday note.

BMO Capital expects two scenarios: the implementation of GDPR is materially negative and Criteo’s stock drops to the teens or Criteo adjusts its business practices or technology solutions to offset any effects, and the stock begins to see a material rebound.

Regardless of the outcome, Salmon said the fourth quarter “won’t be too bad,” considering Criteo’s exposure to e-commerce and its robust sponsored products.

Price Action

At time of publication, Criteo was trading down 2 percent at a rate of $24.94.

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