UPDATE: Maxim Group Downgrades Youku Tudou to Sell, Names $16 PT
In a report published Monday, Maxim Group downgraded its rating on Youku Tudou (NYSE: YOKU) from Hold to Sell, and named a $16.00 price target.
Maxim Group noted, “We are downgrading YOKU to Sell, from Hold, mainly due to likely lower-than-expected profitability in the coming years. YOKU is currently trading at 37x our 2015 P/E, a more than 150% premium to the peer average. Given YOKU's likely 50% faster revenue growth than the peer average, we believe a 50% premium, or $16/share, is more justifiable. Our 10-year DCF also supports a fair value of $15-$16/share. In addition, the lock-up expiration overhang (YOKU shares issued to former Tudou major shareholders are set to expire on February 20) may keep the stock under pressure.”
Youku Tudou closed on Friday at $23.26.
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