Benchmark Raises Price Target on AOL (AOL) Following Stronger than Expected Results
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Price: $49.99 --0%
Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
1 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Benchmark is maintaining its Hold rating on shares of AOL, Inc. (NYSE: AOL) following the release of its Q3 results this morning and is raising its price target from $14 to $16.
The company reported its Q3 results relatively inline with expectations as revenues rose 6 percent to $532 million on slightly better than expected advertising. EBITDA of $87 million topped the firm's estimate by $17 million due to lower employee and marketing expenses.
AOL also reaffirmed its FY11 EBITDA guidance of $340-$370 million, which indicates Q4 EBITDA of $77-$107 million. Search revenue and subscription access were both down for the quarter, but were much better than the Street was forecasting.
An analyst at Benchmark comments, "There was no dramatic decline in the cash flow outlook provided on the conference call, as has been the case in previous
quarters. As such, we view the report as positive... But we do not view these results or our estimate increase as materially changing the outlook."
Management noted no plans for any major acquisitions in the near-term and that it will look for an "opportunistic" time to buyback shares. The company still has $120 million authorized for buybacks.
The firm is increasing its Q4 EBITDA estimate from $90 million to $100 million and its FY12 estimate from $287 million to $328 million. For FY11 and FY12, Benchmark currently estimates EPS of $0.87 and $0.68.
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 $13.35 yesterday.
The company reported its Q3 results relatively inline with expectations as revenues rose 6 percent to $532 million on slightly better than expected advertising. EBITDA of $87 million topped the firm's estimate by $17 million due to lower employee and marketing expenses.
AOL also reaffirmed its FY11 EBITDA guidance of $340-$370 million, which indicates Q4 EBITDA of $77-$107 million. Search revenue and subscription access were both down for the quarter, but were much better than the Street was forecasting.
An analyst at Benchmark comments, "There was no dramatic decline in the cash flow outlook provided on the conference call, as has been the case in previous
quarters. As such, we view the report as positive... But we do not view these results or our estimate increase as materially changing the outlook."
Management noted no plans for any major acquisitions in the near-term and that it will look for an "opportunistic" time to buyback shares. The company still has $120 million authorized for buybacks.
The firm is increasing its Q4 EBITDA estimate from $90 million to $100 million and its FY12 estimate from $287 million to $328 million. For FY11 and FY12, Benchmark currently estimates EPS of $0.87 and $0.68.
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 $13.35 yesterday.
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