Piper Jaffray Cuts Price Target on Yahoo! (YHOO) to $22

Piper Jaffray lowers its price target on Yahoo! (Nasdaq: YHOO) from $33 to $22 but maintains its Buy rating.

Based on checks from numerous US search marketing professionals, the firm believes that Yahoo!'s search "will be fine in Q3". The majority of the checks indicated that search in Q3 was either flat or up compared to Q2, but several ad networks suggested that the display environment suffered, thus the lowered price target and estimates. Piper believes that Yahoo! will report Q3 earnings at the lower end of its guidance range.

Piper maintained its FY08 sales and EPS estimates of $5.56 billion and $0.45, respectively. The firm moved its FY09 sales estimate from $6.22 billion to $5.92 billion and its FY09 EPS estimate from $0.56 to $0.53. The Street is currently expecting FY08 sales of $5.6 billion, EPS of $0.45, and FY09 sales of $6.23 billion and EPS of $0.53.

With shares of Yahoo! down 2.3% today to about $13.43, Piper's lowered price target still represents a potential gain of more than 63% from current levels.

Yahoo! Inc. provides Internet services to users, advertisers, publishers, and developers worldwide.

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