UPDATE: Bank of America Upgrades ReachLocal to Buy on Margin Outlook

Bank of America raised its rating on ReachLocal (NASDAQ: RLOC) from Underperform to Buy and increased its price objective from $10 to $15.

Bank of America commented, "We are upgrading ReachLocal (RLOC), a provider of online marketing and reporting solutions to small to medium businesses (SMBs), to Buy. Our upgrade is not a call on Q2 but a call on a rebounding global SMB market and what we consider conservative FY12 guidance. Since we are becoming more comfortable with RLOC's ability to grow margins, we are raising FY13 rev/adj. EBITDA ests to $528mn/$33mn from $506mn/$27mn. We are taking our PO to $15 (from $10) as we shift focus to 2014 from 2013 using the same 8x EBITDA multiple."

ReachLocal closed at $10.21 on Monday.

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