JANCO Partners Initiates Coverage on Yahoo! (YHOO) with a Market Perform

November 4, 2009 10:01 AM EST

JANCO Partners initiates coverage on Yahoo! (Nasdaq: YHOO) with a Market Perform rating. Price target $16.

JANCO analyst says, "We estimate only a gradually rebounding revenue growth outlook for Yahoo!, which in 2010 will be aided by relatively easy comps. Yahoo! needs several areas of fundamental improvement and execution to drive revenue growth beyond our current single digit percent growth rate estimate for 2010...Yahoo! has a cost management focus with CEO Carol Bartz and recently hired CFO Tim Morse. The company has sorely needed a sharper cost focus and pruning of assets to drive EBITDA and cash flow growth, as financial complacency set in over the past few years..Revenue growth challenge remains. Yahoo! still needs to reinvigorate its relevance to advertisers, which in turn requires regenerating audience and traffic growth...Display advertising needs better targeting. Yahoo! faces challenges vs. Google (Nasdaq: GOOG) in display advertising, as Google is leveraging the technology platform acquired from DoubleClick to improve display ad targeting and streamline ad inventory buying...Microsoft (Nasdaq: MSFT) partnership is logical for Yahoo!...We agree with Yahoo!'s plan to partner with Microsoft and reduce its R&D investment in search, while at the same time taking over all global sales efforts for Internet search advertising on Yahoo! and Microsoft properties. This plays to Yahoo!'s natural strengths and minimizes their R&D weaknesses...Yahoo!/Microsoft deal won't shift the landscape."

To see more analyst ratings on YHOO Click Here.

Related Categories

New Coverage

Stocks Mentioned

Related Entities

• JANCO Partners

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?