Barclays Maintains an 'Equalweight' on AOL, Inc. (AOL); Solid 3Q on Revenues, Margins, Buyback

Barclays maintains an 'Equalweight' on AOL, Inc. (NYSE: AOL) price target raised from $15 to $18.

Barclays analyst says, "AOL posted solid 3Q results that were ahead of ours and Street expectations with revenue of $531.7M (-5.8% Y/Y) and EBITDA of $87.2M (-45.2% Y/Y, 16.4% margin). AOL's encouraging results spanned all of its segments, as the gross revenue decline of 6% was the lowest decline in five years, and AOL's only real weakness came from flattish pro forma Y/Y growth in Domestic Display in the first half of 3Q. We believe these numbers demonstrate that AOL's turnaround strategy is on track, declines are decelerating, and we are beginning to see margin benefits as many costs and 1x items roll-off, which caused G&A to decline ~300 bps Y/Y and helped lead to the EBITDA beat in 3Q. AOL maintained its $340M-$370M full-year 2011 EBITDA guidance."

"As a result of a solid 3Q and bullish remarks around forward ad demand from AOL's CEO, our 2012 rev/EBITDA estimates go to $2.09B/$321M and PT
increases to $18 on ~3.5x our 2012E EBITDA."

For more ratings news on AOL, Inc. click here and for the rating history of AOL, Inc. click here.

Shares of AOL, Inc. closed at $15.02 yesterday.

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