Cowen Trims PT on Yahoo! (YHOO) to $35; Q3 Earnings Mixed, Alibaba (BABA) Stake Sale to Move Forward

Cowen and Company lowers its price target on Market Perform-rated Yahoo! (Nasdaq: YHOO) from $49 down to $35 following Q3 results and outlook issued Tuesday night.

Analyst John Blackledge commented, 3Q results were a mixed bag for YHOO, with in-line top-line results and earnings that modestly beat our & consensus estimates in the quarter. YHOO is moving forward with BABA spin on advice of council, pushing for 4Q completion but note could conclude in Jan. '16. 4Q guidance comes in lower than expected, as a result we trim 4Q and LT estimates.

Blackledge also noted key topics outside of the earnings report: The board authorized the company to move forward with the spin of the Alibaba (NYSE: BABA) stake into a subsidiary called Aabaco Holdings without a PLR from the IRS given a favorable council ruling. Mgmt. said it is striving to complete the spin in Q4, but note due to many moving pieces (SEC requirements, board approvals, holiday market closures) it may not be completed until January '16. Mgmt. and the board are working to evaluate options for the rationalization of the Yahoo Japan stake, although there was no update on form or timing. Additionally, YHOO announced a new search deal with Google (Nasdaq: GOOG)(Nasdaq: GOOGL), but mgmt. noted the deal is non-exclusive and has no buying requirements.

For an analyst ratings summary and ratings history on Yahoo! click here. For more ratings news on Yahoo! click here.

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