Benchmark Upgrades Yahoo! (YHOO) to Buy; Risk Appears Low Into Q3 Results
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Benchmark upgrades Yahoo! (Nasdaq: YHOO) from Hold to Buy. Price target raised from $16 to $20.
Benchmark analyst says, "We upgrade Yahoo to Buy given firming display trends, low guidance/expectations, and likely cautiously optimistic commentary from management during the Q3 earnings report. Yahoo will report Q3 results on Tuesday, October 20, after the close. Expectations for Yahoo’s quarter are muted, but an in-line consolidated result is anticipated. The risk to the stock appears low, since it is trading at a recession-type multiple of 2010E cashflow (7x).
"Our Q3 estimates are slightly ahead of consensus at $1.14 billion in net revenue, $393 million in operating income before depreciation and amortization (OIBDA), $0.08 in EPS, and $0.12 in adjusted EPS. The Street is looking for $1.12 billion in net revenue and $0.07 in EPS...Q4 guidance may be conservative, but we view this as low risk as investors expect recently hired CFO, Tim Morse (June 2009) to provide beatable projections. We are above the Street, which is $1.22 billion in net revenue and $0.10 in EPS."
To see more analyst ratings on YHOO Click Here.
Yahoo! Inc. provides Internet services to users, advertisers, publishers, and developers worldwide.
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