UPDATE: Deutsche Bank Reiterates Hold Rating, Lowers PT on Demand Media After Quarterly Release

In a report published Wednesday, Deutsche Bank reiterated its Hold rating on Demand Media DMD, but slightly lowered its price target from $11.00 to $10.00. Deutsche Bank noted, “Demand Media's quarterly release and call at first blush was positive, as the proposed spin looks like others that we have witnessed that have unlocked shareholder value, including Expedia-TripAdvisor and the IAC break-up in 2008. However, in each of those examples, the pre-spin company: 1) had opportunities to unlock value in the cap structure, and 2) traded at a steep multiple discount to peers. For DMD, we don't see either as a rationale, as the co's fully-baked FCF generation doesn't support adding significant debt and its peer-defined multiple is above average (9x after market). Hence, we don't see the proposed spin as a meaningful catalyst. Shares remain Hold rated.” Demand Media closed on Tuesday at $7.84.