UPDATE: Bank of America Downgrades ReachLocal to Underperform

Bank of America cuts its rating on ReachLocal RLOC to Underperform with a $9 target price in slower growth. Bank of America says, "With 35% performance YTD, margin expansion a year away, and a lower growth outlook, we are lowering our rating to Underperform from Neutral. We see RL as a 16% top-line grower in the next two years, and believe the stock should trade at an 8x 2013E EV/EBITDA (roughly in-line with comp group), plus $3 in cash, giving a $9 PO. We look to get more positive as the US SMB advertising environment improves and RL reaches margin leverage inflection point." RLOC closed at $8.34 a share on Wednesday.