JPMorgan Reinstates IAC/InterActiveCorp (IAC) at Overweight, Opens Positive Catalyst Watch

JPMorgan analyst Cory Carpenter reinstates coverage on IAC/InterActiveCorp (NASDAQ: IAC) with a Overweight rating and a price target of $60.00.

The analyst comments "Following a period of restriction, we are moving to an Overweight rating from a NR designation and establishing a Dec-25 PT of $60 (our rating was OW and our Dec-23 PT was $80 prior to restriction). We are also placing IAC on Positive Catalyst Watch into the ANGI spin on 3/31. The IAC portfolio includes public equity stakes in MGM (22% ownership) & ANGI (84% ownership), wholly owned Dotdash Meredith & Care, Turo investment (32% ownership), ~$1B cash, & more. IAC shares are currently trading near the value of its equity stakes in MGM/ANGI and cash, which means investors essentially receive all of its portfolio companies that we value at ~$1.5B for free. This discount arguably made sense in recent years as Angi and Dotdash Meredith worked through turnarounds, but Dotdash Meredith has returned to healthy growth and IAC plans to spin Angi on 3/31. We think the Angi spin — IAC’s first in 4 years — is likely to unlock portfolio value by simplifying the story and removing a business that has been an overhang on shares for years. The last time IAC spun a public equity stake was MTCH in 2020, which resulted in the IAC stub value re-rating from negative $1B pre-spin to positive $1B three weeks later. We don’t see any reason for this time to be different, and at current levels we think IAC is an interesting way to get MGM exposure with free call options on the rest of the portfolio. We provide an overview of IAC’s key portfolio assets post Angi spin below, with MGM and Dotdash Meredith the principal businesses. We also provide our sum-of-the-parts analysis, IAC stub value build, and thoughts on capital allocation."

For an analyst ratings summary and ratings history on IAC/InterActiveCorp click here. For more ratings news on IAC/InterActiveCorp click here.

Shares of IAC/InterActiveCorp closed at $48.54 yesterday.

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