UPDATE: JPMorgan Resumes IAC/InterActiveCorp (IAC) at Overweight

JPMorgan analyst Cory Carpenter resumes coverage on IAC/InterActiveCorp (NASDAQ: IAC) with a Overweight rating and a price target of $175.00.

The analyst comments "Following a period of restriction on IAC, we are moving to an Overweight rating & $175 Dec-22 price target from a Not Rated designation (OW rating & $185 PT prior to restriction). IAC’s biz portfolio looks very different than it did entering 2021, with the Vimeo spin on 5/25 & Meredith acquisition closed on 12/1. The IAC portfolio now includes Angi (85% stake), Dotdash Meredith, & Care.com, along with a mix of emerging growth biz’s (i.e., Bluecrew, Vivian Health), biz’s largely run for profit (i.e., Ask Applications), and minority investments in MGM (12% stake, $2.6B) & Turo (27% stake, ~$250M invested). IAC is a sum-of-the-parts story that we believe is very compelling at current levels, with investors essentially receiving the Dotdash Meredith digital biz at ~11x EBITDA & all of IAC’s other stub biz’s for free, including Care.com (JPMe $1.5B value). The IAC stub is trading at ~$5B, well below our $7.5B value, & less than the $5.4B value we attribute to Dotdash Meredith digital alone (12x our 2023E EBITDA of $450M). Following a significant portfolio transformation in 2021, we believe execution is critical in 2022 with a focus on Angi Services, Angi rebrand, & Meredith integration. Other potential 2022 catalysts include M&A ($1.5B+ cash with incremental debt capacity), increased Care.com disclosure, & IAC/MGM joint initiatives. We do not think a minority investment in MGM (covered by J.P. Morgan analyst Joe Greff) is the extent of IAC’s ambition in online gaming/sports betting, but as always we expect IAC to be patient with a focus on value. IAC has a strong track record of creating shareholder value, with 11 public companies emerging from IAC over the past 25 years, & we believe IAC is well positioned to build on this success in the coming years with two stand-alone candidates within its existing portfolio in Dotdash Meredith & Care.com."

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 $131.20 yesterday.

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