Shares of WebMD Health Corp. slipped Monday after an analyst said the stock is expensive and advertisers may be turning away from WebMD.
ThinkPanmure analyst William Morrison lowered his rating to "Sell" from "Source of Funds." He said the number of ad campaigns on the site is down about 6 percent, as growth in health-related Internet ads is slowing and WebMD is facing more competition from ad networks that charge lower rates.
Morrison said the second quarter is usually WebMD's strongest, but in addition to the smaller number of campaigns, the number of new advertisers is down more than 50 percent.
The stock lost $1.56, or 4.5 percent, to $33.17 in morning trading.
Since May 28, when a Citi Investment Research analyst upgraded the stock to "Buy" from "Hold," shares are up 23.9 percent. At the time, Mark Mahaney said the stock should rise as advertising revenue from pharmaceutical companies increased.
Morrison holds a target price of $28 per share. The stock last traded under $28 on May 21.
Calls to WebMD seeking comment were not immediately returned.
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