SunTrust Robinson Humphrey Upgrades Yahoo! (YHOO) to Buy

SunTrust Robinson Humphrey upgraded Yahoo! (NASDAQ: YHOO) from Neutral to Buy with a price target of $40 citing positive risk/reward following the recent pullback.

Analyst Robert Peck said the recent pull back in shares of about 13% over the last month "has created 21% upside potential to our target and a favorable risk / reward for investors."

The analyst notes investors are getting 'core Yahoo' for free. "Our analysis indicates that after adjusting for Yahoo!’s ownership of Yahoo! Japan and Alibaba, that investors are essentially getting the core Yahoo! asset for free. Taking the taxed current market value for Yahoo! Japan (which is down ~18% in the last month) and assuming a $150b IPO for Alibaba with a $200b ultimate value for Yahoo!’s stub remaining position accounts for $29 per share for Yahoo. Subtracting out the ~$4b of net cash, an investor is paying -0.2x EBITDA for Yahoo!’s core." Peck also notes core is still in turnaround mode.

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

Shares of Yahoo! closed at $32.87 yesterday.

You May Also Be Interested In

• BofA Securities Upgrades Tesla (TSLA) to Buy on wind up of positive catalysts
• Craig-Hallum Assumes Guardant Health (GH) at Buy, 'We think that GH is undervalued'
• RBC Capital Upgrades Galp Energia SGPS SA (GALP:LI) (GLPEF) to Outperform