Deutsche Bank Starts AOL, Inc. (AOL) at Buy
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Price: $49.99 --0%
Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Deutsche Bank initiated coverage on AOL, Inc. (NYSE: AOL) with a Buy rating and a price target of $40.
AOL sentiment looks to have turned the corner with the recent Microsoft (Nasdaq: MSFT) patent deal and capital returns to shareholders, and the stock should be able to see further multiple expansion as management embraces its new shareholder friendly stance, according to equity analysts Deutsche Bank.
“Our sum-of-the-parts supports further upside, and AOL fits the profile of low-multiple Internet that has worked for investors in the past few years,” said analyst Ross Sandler.
The company is on track to grow OIBDA in 2013 for the first time in a decade, and its OIBDA margin in its Display and Other segment remains well below the peer average and has room for upside, notes the report.
However, given some of the secular challenges in AOL’s businesses, Sandler and his team of analysts struggle to see a path toward meaningful revenue and OIBDA growth beyond cost cutting in the out years, which he says dampens their enthusiasm a bit.
“We believe the worst is behind AOL, downward estimate revisions are likely over, and there could be more value-creating transactions in AOL’s future,” said Sandler, adding that “the market is assigning very little additional value to AOL aside from the $1.1B that was unlocked on the patent agreement with Microsoft (MSFT).”
For an analyst ratings summary and ratings history on AOL, Inc. click here. For more ratings news on AOL, Inc. click here.
Shares of AOL, Inc. closed at $34.48 yesterday.
AOL sentiment looks to have turned the corner with the recent Microsoft (Nasdaq: MSFT) patent deal and capital returns to shareholders, and the stock should be able to see further multiple expansion as management embraces its new shareholder friendly stance, according to equity analysts Deutsche Bank.
“Our sum-of-the-parts supports further upside, and AOL fits the profile of low-multiple Internet that has worked for investors in the past few years,” said analyst Ross Sandler.
The company is on track to grow OIBDA in 2013 for the first time in a decade, and its OIBDA margin in its Display and Other segment remains well below the peer average and has room for upside, notes the report.
However, given some of the secular challenges in AOL’s businesses, Sandler and his team of analysts struggle to see a path toward meaningful revenue and OIBDA growth beyond cost cutting in the out years, which he says dampens their enthusiasm a bit.
“We believe the worst is behind AOL, downward estimate revisions are likely over, and there could be more value-creating transactions in AOL’s future,” said Sandler, adding that “the market is assigning very little additional value to AOL aside from the $1.1B that was unlocked on the patent agreement with Microsoft (MSFT).”
For an analyst ratings summary and ratings history on AOL, Inc. click here. For more ratings news on AOL, Inc. click here.
Shares of AOL, Inc. closed at $34.48 yesterday.
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