UPDATE: Citigroup Upgrades Demand Media to Buy; Q1 Beat, Guidance Raise

Citigroup raises its price target from Neutral to Buy on Demand Media

and raises its price target from $7 to $13 on an inflection suggested by a strong quarter and guidance for Q1. Citigroup says, "Rationale for Our Upgrade — 1) DMD has anniversaried its traffic problems from Google's Panda updates; 2) DMD has diversified its eHow revenue dependency, where GOOG now accounts for 13% of eHow's revenue vs. 22% a year go; 3) DMD has become a potentially material play on the growth of Online Video due to its YouTube channels; 4) eHow appears on a path to sustainable growth – 2nd consecutive Q/Q growth; 5) Registrar biz remains a solid double-digit revenue grower, and could see some benefit from the gTLD domains in 2013; and 6) after a 44% correction since its IPO, DMD has become materially more reasonable at 6x 2013E EV/EBITDA." DMD closed at $7.93 on Tuesday.