UPDATE: SunTrust Initiates Coverage on AOL at Neutral on Value

In a report published on Monday, SunTrust analyst Robert S. Peck initiated coverage on AOL AOL with a Neutral rating and $41 price target.

In the report, SunTrust commented, " We are initiating coverage of AOL with a Neutral rating and a $41 2014 year end price target. Our target is derived around a central tendency of value methodology that employs a Sum-of-Parts valuation and forward 2015 multiples of: 5.5x EBITDA and 18x P/E. INVESTMENT CASE HAS 3 ASPECTS: TURNAROUND, VALUE, AND GROWTH – We think AOL is a very interesting company as it has been a combination of a turnaround, value, and growth company for a few years. Management has done a great job of addressing all of these aspects since the separation from Time Warner in 2009 and the stock is up ~65% in total vs. S&P500 +51%. The key for investors will be how AOL executes on the turnaround going forward."

AOL closed on Monday at $38.30.