UBS Cuts Price Target on Yahoo! (YHOO) Based on a Revised Alibaba (BABA) Outlook
UBS maintained a Buy rating on Yahoo! (NASDAQ: YHOO), and cut the price target to $48.00 (from $51.00), on a revised BABA outlook.
Analyst Eric Sheridan commented, "As noted in today's BABA report (Road Gets Bumpy; Journey Still Intact), we are lowering our BABA price target from $101 to $93 & revising our BABA GMV/revenue estimates primarily due to near-term revenue headwinds in the China macro environment (i.e., a lower willingness to spend on the part of consumers). Importantly, we do not expect these headwinds to impact Yahoo's core business. That said, given the significant contribution of Yahoo's BABA stake (~384mm shares) in our YHOO SOTP analysis, the 8% reduction in our BABA PT results in a 6% reduction in our YHOO PT (from $51 to $48). We make no other changes to our YHOO SOTP at this time."
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Shares of Yahoo! closed at $31.15 yesterday.